❓ CoBTC FAQs
Q: What is CoBTC?
A: CoBTC is a non-custodial, yield-generating Bitcoin product. It allows users to stake their BTC in a secure multi-signature setup and earn leveraged yields — all while keeping control of their Bitcoin.
Q: How do I earn yield with CoBTC?
A: By participating in the staking protocol. You deposit a 0.1% BTC pledge and continue holding the rest in your own wallet. If you adhere to the staking terms, you receive staking rewards without moving your full Bitcoin balance.
Q: How is CoBTC non-custodial if my BTC is locked?
A: CoBTC uses a 2-of-3 multi-sig wallet to store 0.1% Bitcoin as pledge, and 99.9% remains in your own wallet.
Q: What happens if I break the contract?
A: If you violate the off-chain contract (e.g., by moving your BTC prematurely), the 0.1% pledged BTC is slashed and sent to the treasury. Your main BTC holdings remain safe and untouched.
Q: Can I unstake or exit the protocol anytime?
A: Yes — But for fixed-term staking, 0.1% pledged BTC will be slashed. So we strongly recommend you to wait until the contract expires to unlock your pledge and rewards.
Q: Is my Bitcoin safe in CoBTC?
A: Yes. CoBTC is built on Coffer Network’s multi-sig security architecture, with no single point of failure. Vaults are auditable, and smart contracts are regularly reviewed and externally audited.
Q: Do I need to wrap or bridge my BTC?
A: No. CoBTC uses native Bitcoin secured via multi-sig on the Bitcoin network — not wrapped tokens or bridges. It mints a corresponding ERC-20 token for DeFi usage, without compromising Bitcoin's base-layer integrity.
Q: What networks does CoBTC support?
A: CoBTC is minted on EVM-compatible chains such as Ethereum, Arbitrum, or others supported by the protocol. It retains native BTC backing, with full on-chain transparency.
Q: Who can participate in CoBTC staking?
A: Anyone with Bitcoin wallet can participate — whether you're a retail user, miner, or institution. No permission or KYC is required for non-custodial participation.
Q: What are the main risks of using CoBTC?
A: While CoBTC is designed for security and transparency, there are still risks users should be aware of
- Slashing of 0.1% BTC: If you break the off-chain contract (e.g., by moving BTC prematurely), your 0.1% pledged BTC will be slashed and sent to the treasury
- Yield Fluctuation: Staking rewards are not fixed. Yields can vary based on market conditions, TVL allocation, protocol revenue, and DeFi or CeFi performance
- Smart contract risks: Mitigated by audits and multi-sig design
As always, users should only participate with assets they understand and are comfortable managing.