Core DAO and Element Wallet are collaborating to expand Bitcoin’s utility for holders, offering new avenues for interaction beyond simple storage. This partnership emphasizes user privacy while aiming to maximize the security of decentralized finance (DeFi) mechanisms like Bitcoin staking.

BeInCrypto discussed with representatives from both platforms to explore how user privacy and enhanced functionality in staking can create new opportunities for Bitcoin-oriented DeFi participation.

Expanding Bitcoin Use Cases

For 2025, the CORE team aims to develop new use cases for Bitcoin holders who wish to use their BTC rather than keep it perpetually stored. Core achieves this by enabling Bitcoin users to interact easily with DeFi.

“A lot of people have been holding Bitcoin over the years and are totally happy with that. I get it, myself included, but there are also a lot of people who want to actually do something with their BTC and not just hold it. They want to actually put it to work, bring it into DeFi, take out a loan on it, or lend it out and earn some yield. Core basically allows for whatever you want to do with your Bitcoin,” explained Dylan Dennis, Contributor at Core DAO.

Designed to enhance Bitcoin’s utility while preserving its decentralization and security, Core is a layer-1 blockchain that integrates with Bitcoin and offers EVM compatibility. Launched in January 2023, it has achieved a market capitalization of over $497 million.

The Core DAO, a decentralized autonomous organization, supports and develops the Core blockchain, pursuing security, scalability, and decentralization through community-driven collaboration.

Members of the Core DAO used the term BTCfi to describe decentralized financial services and applications built on a Bitcoin-based blockchain. This initiative combines Bitcoin’s security and reliability with innovative financial services found in DeFi platforms. 

BTCfi enhances Bitcoin’s value by expanding protection and increasing utility via on-chain yield and a comprehensive dApp ecosystem.

Meanwhile, Core’s EVM compatibility enables developers to use familiar Ethereum tools for interoperable dApps. These dApps increase Bitcoin’s versatility and cater to diverse user needs, from simple BTC staking to complex DeFi activities.

“Basically, Core was created by Bitcoiners. The whole point of Core is to scale Bitcoin and unlock new use cases for every kind of Bitcoiner, whether you’re someone who wants to take no new risk, and just keep your BTC in your wallet. Then on the other side, there’s this whole Bitcoin DeFi ecosystem, with 100+ Dapps, all BTC-based. Whatever you want to do with your BTC you could do it with Core,” Dennis said.

While exposing Core users to DeFi, Core also uses a three-in-one strategy to secure its high-throughput blockchain.

The Satoshi Plus Consensus for Ensured Decentralization

To stay true to Bitcoin’s core principles of decentralization and security, Core employs a mechanism defined as the Satoshi Plus Consensus. This method involves active collaboration from Bitcoin miners, CORE stakers, and Bitcoin Stakers. 

Bitcoin miners contribute to the security of the blockchain by delegating their Proof-of-Work (PoW) mechanisms to a Core validator. This non-destructive delegation of PoW allows miners to leverage their existing work without choosing between securing Bitcoin and Core.

Core’s security is also enhanced through a delegated Proof-of-Stake (dPoS) mechanism, which allows holders of Core’s native CORE tokens to participate in network security by delegating their tokens to validators.

Finally, Core’s Satoshi Plus consensus mechanism incorporates non-custodial Bitcoin staking. 

“With the non custodial staking, you can stake Bitcoin in your own wallet by putting a time lock on it. It’s called a time lock contract and it’s a Bitcoin native feature. You lock it in that transaction, you include the validator you want to delegate to, and for helping to decentralize and secure the core network, you get paid out in Core tokens for doing so without any new trust assumptions. So, something that helps to secure Core also helps with the whole mission, which is to unlock new use cases,” Dennis added.

Though Core emphasizes Bitcoin functionality for its holders, the Element Wallet is in charge of user privacy and the secure management of digital assets.

Addressing User Privacy and Asset Security

While the nature of the Core blockchain remains decentralized and transparent, the same does not apply to user details. 

Privacy is a crucial aspect for Bitcoin users and the crypto ecosystem in general, explained Bruna Brambatti, Marketing Manager at Element Wallet. 

“You’re going to see a lot of people that have random handles. They’re not using their profile picture. They are using an NFT. People like to be private and want to keep their money private. Even though we have this open space with the blockchain, we’re never going to know who the owner of that money in that wallet is,” she said. 

Element Wallet is a multi-chain crypto wallet for seamless asset management and DeFi access. Though it’s compatible with different crypto assets like Bitcoin and TRON, it was initially built for Core participants and acts as the first and primary interface for the Core blockchain.

To address user privacy concerns, Element Wallet uses various mechanisms to protect identity and financial information. Element’s messaging uses end-to-end encryption for user privacy. Only the recipient can decrypt messages, protecting content from third parties.

While Element does not store these messages’ content, it maintains a record of communication between users, excluding the actual message content. The messages themselves are stored locally on the users’ devices.

Element also integrates in-chat peer-to-peer (P2P) transfers. Users can send payments or payment requests within these chats, enhancing security and clarity by communicating directly with the recipient. This functionality provides added security and convenience, enabling direct trading within the application.

“We never, ever have access to anyone’s funds or to their seed phrases. We do believe that the owners should have the power in their hands, so they can do what they think is best with their assets and trust that they are theirs,” Brambatti added. 

To ensure that users can easily navigate the Core blockchain, Element Wallet incorporates user-friendly design strategies to simplify interaction.

Breaking Down Web3 Complexities

Core and Element representatives emphasized that community was at the heart of the blockchain’s success. To further cultivate user engagements, Core DAO focuses on breaking down onboarding barriers and facilitating user experience.

“We’re really focused on simplifying the kind of Web3 complexities that are often found in the space today. As we work closely with the Core DAO and the core team, and as the space evolves, we just find more opportunities to really simplify it and make UX be at the forefront of this,” explained Sean Schireson, Head of Product at Element Wallet. 

Element Wallet simplifies Core chain-related activities by providing a unique and comprehensive wallet that meets all user needs.

“The Element Wallet really enhances the user experience on Core chain, since it was built for the Core ecosystem. If you want to buy crypto, swap, non custodially stake your Bitcoin, you could do it all. If you want to chat with people, you could do it on there. So just trying to get the whole community onboarded, so that we could all be on this one Element Wallet and all transact together and just make the experience better for everybody,” explained Dennis.

The Core team created Sparks, a dynamic system for measuring contributions to the Core community’s growth to encourage user participation. Sparks track user activity and engagement within the Core Chain ecosystem. Based on their interactions and involvement, they are awarded to users and their teams. 

Daily Spark allocations are distributed based on activity level, with more active users receiving larger amounts. Users can also receive sparks by engaging with the Element Wallet. 

“What we want to do is make that entry point feel like a consumer app that you’ve used and loved before. And that’s really our gold element. We’re not trying to necessarily reinvent the wheel, but we’re definitely trying to have a new spin on an otherwise kind of saturated UX market. And so that’s where we’re really focused on there,” concluded Schireson.

This focus on user experience and community engagement aims to facilitate broader adoption and participation in the developing BTCfi sector.

Despite recent price declines, crypto inflows soared to $1.3 billion last week. It marks the fifth consecutive week of positive inflows, demonstrating sustained investor confidence in the cryptocurrency market.

Interestingly, Ethereum inflows almost doubled the positive flows into Bitcoin, marking a notable paradigm shift.

Crypto Inflows Reached $1.3 Billion Last Week

The latest CoinShares report indicates that crypto inflows reached $1.3 billion last week. Specifically, Bitcoin saw inflows of $407 million, while Ethereum saw significant ‘buying the dip’ after its price dropped to $2,500, leading to inflows of $793 million.

Analysts attribute Ethereum’s inflows to the hype around the upcoming Pectra upgrade.

“Ethereum is still holding its uptrend support since May 2023. Last week, Ethereum ETFs had over $400 million in inflows. ETH big upgrades are coming next month. Trump is still buying and holding ETH. Mark my words; Once Ethereum goes above $4,000, it’ll pump like crazy,” one analyst observed.

This surge in crypto inflows follows a week where crypto investments saw $527 million in inflows amid the DeepSeek AI frenzy and Donald Trump’s tariffs on several countries. The continued interest highlights how institutional and retail investors capitalize on market dips to accumulate digital assets.

However, the market corrections over the five trading sessions saw the AUM (asset under management) of ETPs drop to $163 billion. This represents a drop of around 10% from the all-time high of $181 billion established in late January.

Notwithstanding, global ETPs remain the largest Bitcoin holder compared to any other entity.

“With ETPs globally now representing 7.1% of the current market capitalization, making them the largest holder relative to any other entity,” an excerpt in the report stated.

Trading volumes remained steady at $20 billion for the week, suggesting active repositioning among traders and investors amid recent price fluctuations. US President Donald Trump’s tariffs were a key trigger for the corrections, leading to a historic liquidation event in the crypto market.

More Altcoin ETFs on the Horizon

In a related development, Nasdaq has formally filed 19b-4 forms with the US SEC (Securities and Exchange Commission) to list and trade two ETPs from CoinShares. First, the CoinShares XRP ETF and second, the Litecoin ETF, with the proposed funds expected to provide investors exposure to XRP and LTC, respectively.

CoinShares is not alone—other firms such as Grayscale, WisdomTree, Bitwise, and Canary Capital have also submitted filings for an XRP ETF, as reported in recent filings with the SEC.

Ripple CEO Brad Garlinghouse recently stated that an XRP ETF is inevitable, emphasizing the growing demand for structured investment vehicles that provide regulated exposure to the asset.

Similarly, Litecoin ETFs are gaining traction, with Canary Capital and Grayscale applying for their respective funds. Nasdaq has also filed to list a Litecoin ETF, further reflecting the expanding market for crypto investment products.

This surge in ETF filings aligns with broader industry trends, where institutional players seek regulated investment vehicles for alternative digital assets.

As speculation around a Litecoin ETF builds, on-chain data reveals that whales are increasing their LTC holdings, anticipating potential regulatory approval.

Such accumulation trends have historically been early indicators of strong institutional and retail demand.

Japan’s FSA (Financial Services Agency) is considering lifting the ban on Bitcoin ETFs (exchange-traded funds) and reducing the tax burden on crypto investors.

The proposed changes aim to reclassify crypto assets as financial products akin to securities. Such a paradigm shift would enhance investor protection and boost mainstream adoption.

Japan Considers Tax Reforms and Crypto ETF Approval

Japan’s FSA is holding closed-door study sessions with industry experts to discuss regulatory overhauls and market expansion. Specifically, the agency wants to evaluate whether the current regulatory framework can accommodate the growing crypto market.

“The aim is to protect investors by requiring businesses to disclose more detailed information,” local media reported.

Accordingly, they plan to announce a formal system reform policy by June 2025. Similarly, legal amendments will likely be proposed at the 2026 National People’s Congress session. This initiative follows Japan’s broader effort to integrate digital assets into its financial system while ensuring stricter compliance and transparency.

One of the most anticipated changes is reducing Japan’s steep tax rates on crypto profits, which currently reach up to 55%. The FSA is exploring a more favorable tax regime that could decrease the rate to 20%. Such a move would align with capital gains taxes on other financial instruments like stocks.

Additionally, approving Bitcoin spot ETFs would allow institutional investors to participate in the market more securely. According to Hay Insights, Japan, the country’s financial data hub, has lagged behind other markets, such as the US and Canada, in embracing Bitcoin ETFs.

“These financial instruments [Bitcoin ETFs] have gained traction in markets like the United States and Canada, where regulators have approved spot and futures-based ETFs. However, Japan’s approach remains cautious, reflecting its stringent regulatory environment,” HayInsights wrote.

Analysts believe regulatory clarity and lower taxation will attract more institutional and retail investors despite the challenges. It would strengthen Japan’s position as a global crypto hub if it does happen.

Meanwhile, Japan’s positive stance on cryptocurrencies follows a series of regulatory measures to tighten oversight. Two months ago, the FSA warned KuCoin, Bybit, Bitget, and other exchanges about unregistered operations. As BeInCrypto reported, the regulator highlighted concerns about unlicensed trading platforms operating within the country.

Now, Japan has urged app stores to remove these platforms entirely, signaling a crackdown on unregulated crypto businesses.

Furthermore, the agency conducted a comprehensive review of crypto laws four months ago. BeInCrypto reported that tax cuts were a key focus ahead of Japan’s October elections. The move was perceived as an effort to garner support from pro-crypto lawmakers and investors.

Around the same time, Japanese lawmakers proposed adopting Bitcoin reserves and fostering DOGE policy innovation, following in the footsteps of the US.

Therefore, the potential approval of Bitcoin ETFs and tax reductions would mark a significant milestone for Japan’s crypto industry. If implemented, these measures could position Japan as a leading jurisdiction for digital asset investment. Like in the US, the development would attract domestic and international capital.

However, challenges remain. Regulators must strike a balance between fostering innovation and maintaining financial stability. The FSA’s ongoing consultations with industry experts and stakeholders will be crucial in shaping a regulatory framework that encourages responsible growth.