Corn L2 Brings Bitcoin DeFi to Life With BTC Gas Fees

An increasing number of projects are working on bringing decentralized finance (DeFi) to the trillion-dollar Bitcoin (BTC) economy.

So far, the crypto world has seen Bitcoin-related layer two (L2) chains, bridging infrastructure, wrapped tokens, and staking models. However, no project can claim to have found product-market fit just yet.

The latest entrant to join this crypto gold rush is an Ethereum-based layer two (L2) called Corn.

Fresh off a $6.7 million seed funding round, Corn wants to “expand the usefulness of Bitcoin.”

What is Corn, and does it have the potential to become a top Bitcoin DeFi project? Let’s find out.

Table of Contents Table of Contents

1. Key Takeaways
2. What Is Corn L2?
3. Can Corn Become the Top Bitcoin DeFi Project?
4. How Decentralized Is Corn's BTCN Token?
5. How to Become Eligible for the CORN Airdrop?
6. Team Behind Corn
7. The Bottom Line
8. FAQs
9. References

Show Full Guide

Table of Contents

1. Key Takeaways
2. What Is Corn L2?
3. Can Corn Become the Top Bitcoin DeFi Project?
Show Full Guide
4. How Decentralized Is Corn's BTCN Token?
5. How to Become Eligible for the CORN Airdrop?
6. Team Behind Corn
7. The Bottom Line
8. FAQs
9. References

What Is Corn L2?

Corn is an Ethereum-based L2 that uses a wrapped Bitcoin token called BTCN for gas fee payments.

BTCN is a token backed on a 1:1 basis by native Bitcoin. According to Corn, BTCN will have multiple custodians, smart contracts, and bridging protocols.

The network also has a native token called CORN, which will be used for staking and governance.

Can Corn Become the Top Bitcoin DeFi Project?

One of the ways Corn attempts to bring Bitcoin DeFi to life is by making BTC more than a buy-and-hold token.

As the gas token of the Corn L2, BTCN will constantly be used every time a transaction occurs on Corn.

An economic flywheel inspired by Curve Finance’s veTokenomics will be implemented to ensure the creation of a vibrant DeFi ecosystem centered around Corn’s wrapped Bitcoin token and its governance token CORN.

Corn’s Economic Flywheel

Here is how Corn’s flywheel is expected to work.

When CORN holders stake their tokens, they receive a voting right token called popCORN.

popCORN holders have the power to direct network emissions – BTCN from network gas fees and CORN from network emissions –  to any decentralized application (Dapp) on the chain.

This model incentivizes Dapps to offer competitive yields and rewards to users.

Naturally, CORN stakers will direct network emissions to applications offering maximum yield.

CORN stakers will also benefit from a “bribe market” that allows anyone to reward stakers in exchange for their vote.

The model could also incentivize Dapps to hoard CORN tokens, as seen during the “Curve Wars” when Dapps began accumulating Curve Finance’s governance token to direct liquidity to their pools.

Ultimately, as the ecosystem retains liquidity and users, high-quality applications are expected to be attracted to the chain, reinforcing the economic flywheel.

In an email note, research firm Revelo Intel likened Corn’s incentive model to Berachain’s proof-of-liquidity (PoL) system.

How Decentralized Is Corn’s BTCN Token?

Wrapped Bitcoin tokens are often criticized for not incorporating fundamental crypto principles such as decentralization, permissionlessness, and trustlessness.

Take the wBTC, the world’s most popular wrapped bitcoin token by market cap, for example. Few of its users would know that the minting of wBTC is not permissionless or trustless. WBTC has only one custodian (i.e. a company named BitGo) who is responsible for keeping custody of BTC reserves and minting wBTC.

From what we know of Corn’s wrapped bitcoin token, as of August 22, 2024, the minting of BTCN is not permissionless.

“Only the most reputable, community-trusted counterparties will be granted minting rights to $BTCN. These select few firms will be carefully considered by leading risk managers across the DeFi ecosystem prior to onboarding,” said Corn in a press release.

Given the fact that the Bitcoin faithful can be hyper-sensitive to topics like decentralization and trustlessness, it remains to be seen how many BTC holders will be open to using Corn’s wrapped bitcoin token.

In an emailed newsletter from May 2024, crypto research firm Ouroboros Research explained:

“Trustlessness matters. We’ve spoken to Bitcoin whales and have learnt that they want to earn yield on their Bitcoin but often find it hard to trust custodial Bitcoin wrappers.”

“Common pushbacks from using wBTC include centralized mint and burn entities, custodial risks, and KYC requirements. We believe this is what is driving only 55-60% of Bitcoin supply being active over the past 3 years. This is low considering BTC fluctuated between $15-75k in that period but this is changing,” noted Ouroboros Research.

How to Become Eligible for the CORN Airdrop?

To become eligible for the CORN airdrop, you must collect points known as KERNELS, which will represent your proportional share in the upcoming Corn airdrop.

As of August 22, 2024, you can collect KERNELS on the Galxe website. You will have to complete the following tasks:

Team Behind Corn

Corn L2 was founded by developers behind popular crypto projects such as Badger, code4rena, Slingshot, and Oxbow.

In August 2024, Corn announced it raised $6.7 million in a seed financing round led by Polychain Capital.

Binance Labs, HTX Ventures, Framework Ventures, and ABCDE also participated in the funding round.

Yi He, co-founder of Binance and Head of Binance Labs, said:

“We look forward to supporting Corn as they develop a utility-driven ecosystem centered around Bitcoin, enabling it to be more effectively and efficiently utilized in DeFi.”

The Bottom Line

Corn is a nascent L2 project that has caught the attention of the crypto world by becoming the first Ethereum-based chain to use BTC as its gas token.

So far, Corn has stated its intention of creating an ecosystem that prioritizes retaining liquidity, users, and builders.

This is a project to keep an eye on. Time will tell whether Corn can make a name for itself as a top Bitcoin DeFi project.

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