Mirror Staking Protocol: A Secure Bitcoin Staking Solution
On many blockchains, staking is a helpful tool that helps secure the network while letting users earn passive income. However, despite being the most popular blockchain, Bitcoin doesn't feature staking. Mirror Staking Protocol aims to change this by incorporating staking into Bitcoin's design. How does it work, and why is it important? Explore this guide to learn the details of the Mirror Staking Protocol.
Key Takeaways:
Mirror Staking Protocol, formerly called Mirror L2 before a rebrand, is a Bitcoin protocol that works with Layer 2 networks.
Currently, Mirror Staking Protocol is collaborating with Bybit Web3 Airdrop Arcadeās Bitcoin Layer 2 Season Campaign. Users can claim a share of the substantial prize pool, which exceeds $400,000 in TGE tokens.
What Is Mirror Staking Protocol?
Mirror Staking Protocol is a Bitcoin protocol that works with Layer 2 networks. Formerly called Mirror L2 before a rebrand, the project allows people to stake Bitcoin in a secure, decentralized and reliable manner, and provides computing power for Layer 2 chains.
What Is a Bitcoin Layer 2?
Bitcoin Layer 2 networks run alongside Bitcoin. They use Bitcoin's ledger as their underlying framework, adding extra smart contracts and protocols that implement features not found on the main Bitcoin chain.
What Does Mirror Staking Protocol Aim to Achieve?
Mirror Staking Protocol aims to make Bitcoin more versatile. The main Bitcoin network is currently an excellent way of processing transactions, but it's missing some of the features of modern blockchains. Layer 2 networks hope to address this issue by offering services such as scalability and improved capabilities for smart contracts. However, designing a brand-new Layer 2 from scratch requires formidable technical abilities.
The Mirror Staking Protocol project hopes to step in and make Layer 2 design easier. It provides an essential support framework that Layer 2s can implement in order to add staked assets to their systems. Not only does this provide a helpful decentralized asset custody scheme, but Mirror Staking Protocol also hopes it will help Layer 2s process transactions more efficiently, providing the battery pack to power other systems.
How Does Mirror Staking Protocol Work?
Mirror Staking Protocol functions as a utility layer between the main Bitcoin chain and other Layer 2 networks. It uses a node system as its core mechanism to run its larger system. Mirrorās users individually manage thousands of nodes to provide full decentralization while offering the computing power needed to run the network.Ā
When Layer 2 projects choose to use Mirror Staking Protocol for its decentralized BTC staking solutions, they get the support of users to stake BTC through the Layer 2 network. The Layer 2 project then exchanges these BTC tokens for mBTC tokens, and the nodes on Mirror Staking Protocol form a decentralized asset custody scheme in which they manage the Layer 2 project's BTC for them.Ā
Tokens that have been staked for assets acquire value over time. When users are ready to cash out, the Layer 2 can then trade the mBTC for BTC and distribute rewards to its users.
Features of Mirror Staking Protocol
Layer 2 networks looking to offer more services to their customers can use Mirror Staking Protocolās many helpful services to perform these tasks.
Overlapping Multi-Signature Groups Scheme
Layer 2s looking for a novel way of handling transaction verifications can employ Mirror Staking Protocol's overlapping multi-signature groups. This method of node management allows multiple nodes in a group to sign a transaction, offering greater security and efficiency for Layer 2 projects. People who choose to use this feature from Mirror Staking Protocol receive access to several perks.
Multi-Signature Groups
The node election process consists of sets of five nodes. For every transaction, a majority of these nodes have to verify a transaction in order for it to be finalized. This provides extra security, since a single malicious actor canāt hijack the verification process.
Overlapping Groups
In addition, groups of nodes end up forming overlapping groups. If validators from one group arenāt used, they can join together with unused validators from another group. By forming overlapping groups, Mirror Staking Protocol offers users faster and more scalable transactions.
Multi-Signature Efficiency
Overlapping multi-signature groups also adjust in size based on transaction amount. Only three nodes are needed to finalize transactions of < 1 BTC, while transactions of > 1 BTC require more nodes. By downsizing node needs for small transactions, Mirror Staking Protocol reduces network needs during times when several small transactions are being processed.
Stake Security
Ultimately, Mirroās node system provides fantastic security for staking funds. Layer 2s can offer Bitcoin staking to their users with full confidence that their funds are in safe hands.
Node Election and Rewards
Even if you aren't running a Layer 2, you can participate in Mirror Staking Protocol by assisting with node election. Node runners are elected by community members. Those who interact with the community and gain trust can win votes in order to manage a node. They then stake funds equal to 1 BTC to operate it.Ā
These funds act as collateral in case the node provider fails to verify transactions properly. Running a node provides the chance to earn additional income, because node operators earn call options that let them buy a set amount of MIRR for a strike price of $0.12.
Layer 2 Bitcoin Staking
With Mirror Staking Protocol, other projects can participate in Bitcoin staking. Participants choose to temporarily lock their Bitcoin in smart contracts through the Mirror Staking Protocol ecosystem in order to earn passive income on these funds. When they choose to unlock their tokens and cash out their rewards, they reclaim their original funds along with additional interest earned on the BTC tokens.
MIRR Tokenomics
Mirror Staking Protocol uses the MIRR governance token to make community decisions and manage its Bitcoin staking system. A total supply of 500 million tokens are distributed in the following manner:
User participation rewards: 26%
Node provider rewards: 24%
Project team and advisors: 18%
Investors: 14%
Ecosystem development reserve: 12%
Treasury reserve: 6%
Node rewards will be distributed over a 12-month period, while investor and team allocations will be unlocked in several rounds over the course of four years. Tokens allocated through the airdrop will have a three-month waiting period before unlocking.
Mirror Staking Protocol Road Map
Mirror Staking Protocol has been working on the design of its system for a while, and in 2024 it's finally ready to start testing it. In March 2024, the Mirror Staking Protocol testnet went live.The project hopes to launch its mainnet in May 2024 after ensuring that the node election process and BTC bridging go smoothly.
Once Mirror Staking Protocol goes live, its main focus will be on bringing its decentralized BTC staking solutions to more networks. It hopes to attract more Layer 2 projects that want to stake Bitcoin by using its services. After building a bigger user base, Mirror Staking Protocol hopes to eventually enable staking of its mBTC token.
Mirror Staking Protocol is currently one of the Bitcoin Layer 2 projects in the Bybit Web3 Airdrop Arcadeās Bitcoin Layer 2 Season Campaign. Participants can claim a share of a substantial prize pool that exceeds $400,000 in TGE tokens.
Closing Thoughts
Mirror Staking Protocol provides a variety of helpful services for other Bitcoin projects. By enabling Bitcoin staking and node management, Mirror Staking Protocol makes it easier for Layer 2 projects to reward users and encourage earning passive income. The project is still in its early stages but it could have a lot of potential. Its upcoming airdrop and mainnet launch will be excellent opportunities for more users to get involved.
Learn more about the project and how you can claim rewards by checking out the Bybit Web3 Airdrop Arcade Bitcoin Layer 2 Season Campaign. Weāre also hosting a Web3 livestream on May 8, 2024, on the Bitcoin economyās biggest alpha. Stay tuned here! In the meantime, you can watch our April Web3 livestream, in which we cover trending Bitcoin Layer 2 projects.
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