Participation Guidelines for BTCFi Institutions

This document is a primer for institutions on how to participate in BTCFi, focusing on Bitcoin staking and its associated risks. It outlines the speculative nature of cryptocurrencies and emphasizes the importance of understanding the risks involved, including the potential for complete loss. The document discusses the evolution of Bitcoin's role in decentralized finance, highlighting innovations such as Layer 2 solutions and the Taproot upgrade that enable more complex on-chain actions. It details the mechanisms of Bitcoin staking, including locking and bridging, and presents notable projects that facilitate these processes. Additionally, the document addresses critical technical considerations for institutions, such as the choice between custodial and self-custodial solutions, and the importance of selecting the appropriate address formats. A checklist is provided to guide institutions through regulatory compliance, custody model selection, and risk mitigation strategies, ensuring a comprehensive approach to engaging in BTCFi.