What Is Core (CORE) and How Does It Work?

Core is a Layer 1 blockchain network that uses the Satoshi Plus hybrid consensus algorithm that combines the mining security provided by Bitcoin with the Ethereum-based smart contract functionality. The cryptocurrency of the Core blockchain is CORE and it has a maximum supply limit of 2.1 billion tokens that can be staked, governed and distributed among the validators as a reward. Since its mainnet launch, Core has processed millions of transactions, with total value locked in its DeFi ecosystem reaching into the hundreds of millions of dollars.

Core is the answer to the problems that most of the blockchains face separately while Bitcoin is the most secure blockchain, it lacks programmability, while Ethereum provides programmability but there are still certain issues of security. So, in one sentence, Core is the blockchain network that allows leveraging the security provided by Bitcoin with the help of proof of work and functioning of Ethereum smart contracts at the same time.

Key Takeaways

• Core, CORE, is a Layer 1 blockchain that uses Satoshi Plus hybrid consensus algorithm connected to Bitcoin’s mining.
• CORE token has a limited maximum supply of 2.1 billion, similar to the Bitcoin’s cap.
• The mainnet of Core has been launched on January 14, 2023 and the network is Ethereum Virtual Machine-compatible.
• At the moment, CORE token is not available for trading on Binance or Kraken, while it is listed on Coinbase, OKX and Gate.io.
• Core DAO, CORE token described here, is a different project from an unrelated token called Core Token, CTN.

What Is Core Crypto

Core is a Layer 1 blockchain fully compatible with the Ethereum Virtual Machine (EVM), allowing it to process the same kind of smart contracts and decentralized applications as Ethereum itself. What distinguishes the network among other Bitcoin aligned blockchains considered in this piece is how close this network is trying to integrate Bitcoin mining security in its operations. Core officially started its mainnet on January 14, 2023, and according to CoinMarketCap, the platform conducted millions of transactions ever since its launch.

The CORE token is used to power the mechanism, paying transaction fees, staking, and participation in the governance of the network. Probably better to note it at the beginning, but there is one more naming confusion that needs to be noted in terms of writing about CORE. Core DAO’s CORE token, being discussed in this article, is another project that is separate from the unrelated Core Token with ticker CTN traded elsewhere with different supply and history. This guide discusses Core DAO’s CORE.

The Blockchain Trilemma Core Is Trying to Solve

The process of building a blockchain is never an easy one due to the presence of the blockchain trilemma, which is a theory of incompatibility of the decentralization, security, and scalability of a project. Bitcoin, on the one hand, is prioritizing decentralization and security due to the proof of work mechanism and mining, but its scripting language is too primitive to conduct smart contract operations. At the same time, Ethereum introduced the concept of the programmability of the network addressing the problem of scalability in a completely different way, including switching to proof of stake.

What makes Core unique is the possibility to use the best of two different worlds. Linking the security of Core with the mining hash rate of Bitcoin and building Ethereum compatible smart contracts over it suggests that the developers want to have all the advantages of the both chains. However, whether the combination of the two would actually allow having a superior decentralized and secure network should be proven in practice.

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How Does Core Work, Satoshi Plus Consensus Explained

Core works using the Satoshi Plus consensus algorithm, which relies on three separate sources of security rather than a single source. It is easier to understand the work principle of this system when looking at each element separately.

1. Delegated mining power of Bitcoin miners. The existing miners of Bitcoin can delegate their mining power to the validators of Core without purchasing extra equipment.
2. Timelock of BTC holders. The owners of Bitcoin can lock their money for some time and get a right to vote for the validators of Core.
3. Staking of CORE tokens. Token holders can lock their tokens through a delegated proof of stake and then vote for the validators.
4. Validator election. Validators are chosen according to the formula that takes into account all the above elements and allows selecting 21 validators for each period.
5. Block creation. Block creation and validation of transactions are done by validators during their terms.
6. Reward distribution. Rewards for block validation are distributed in the form of token issuance and transaction fees.

The three-tier system of mining delegation, voting by Bitcoin holders, and staking CORE native tokens is a basic assumption concerning the technical architecture of Core and its attempt to build a better security architecture as compared to the use of any separate technology.

CORE Tokenomics and Token Distribution

It is crucial to understand the tokenomics of CORE when analyzing the usability of this blockchain and future supply pressure. The total amount of tokens of this project amounts to 2.1 billion tokens and it is a deliberate imitation of the supply cap mechanism of Bitcoin instead of using inflation. Based on the current statistics, the number of tokens distributed amounts to 1.2 billion tokens which means that 59 percent of the total supply have already been unlocked.

The supply of the core will be divided into six sections namely, Node Mining (40%), Users (25%), Contributors (15%), Reserves (10%), Treasury (9.5%) and Relayer Rewards (0.476%). As per the official white paper released by the Core DAO, the protocol has abandoned its earlier fee burning model in favor of rewarding validators and the community.

Current CORE Price and Market Data

Just like many tokens whose initial hype is dead and gone, the current price of CORE has fallen considerably compared to its all-time highs. As seen in the tracker data above, the current price of CORE ranges from $0.018-$0.03, compared to its all time high ranging from $4.12-$6.46 depending on the tracker in the early 2023 and 2024.

However, as shown in the table above, there are huge variations among different trackers so it is extremely important to make sure you know about the live price of CORE before making any move, so you can check it out on CoinGecko or CoinMarketCap.

Where Is CORE Commonly Used

Core consists of the decentralized finance applications that work on the Bitcoin aligned security provided by the project.

• Pell Network. Multi-chain restaking protocol that provides security across multiple networks.
• Colend Protocol. Lending platform of the Core blockchain that allows borrowing and lending of assets.
• COREx Network. Decentralized exchange running in the Core ecosystem.
• Bitcoin staking products. The applications where the users can earn rewards from locking their Bitcoin in order to run the validators in Core.
• Cross chain bridges. Connects Core with other EVM compatible chains.

As stated by tastycrypto, the total value locked on Core was around 900 million dollars while there was some decent activity among millions of active wallets.

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Is CORE Available on Major Exchanges

Yes, CORE is present in several popular exchanges but not in all of them. Thus, according to Binance’s price page, one cannot purchase and trade CORE tokens on Binance, and according to Kraken’s listing page, this asset is not tradeable on the platform. Apart from that, CORE can be found on Coinbase, OKX, Gate.io, and other exchanges, and CORE is EVM-compatible, which means it can be kept in self-custody wallets like MetaMask.

This should be considered while thinking of buying CORE tokens based on the idea of their availability on all possible exchanges because of their relative popularity. The only way to make sure about it would be consulting the information provided by the exchange.

CORE Compared to Other Bitcoin Aligned Chains

CORE is a relatively new blockchain belonging to the group of blockchains aiming at providing liquidity and security of Bitcoin combined with smart contract functionality. Let us compare it to some of its peers to identify what makes CORE unique.

Stacks has the most experience in this field which means that they have years of developed tools for developers, while BOB has an absolutely unique technical approach to the problem.

Why Has CORE’s Price Dropped So Much From Its All Time High

A dramatic drop in the value of CORE above 95 percent from the highest levels observed in 2023 and 2024 is a distinctive feature of many cryptocurrencies that emerged in a speculative manner. Prices before and immediately after the token issuance might be formed as a result of the illiquidity and speculation rather than driven by real-world use cases. When more CORE supply has become unlocked and entered the market, it led to a reduction in the price along with overall crypto market conditions.

Such behavior is not unique to Core as many Layer 1 tokens that initially appeared amid much hype and expectations have undergone the same pattern of early peaks and then a lengthy drop in price. It still is a matter of discussion whether the current level of CORE price better reflects the real network usage and the value locked.

How Core’s Validator Election Actually Works

Familiarizing with the specifics of how Core validator election takes place provides us with an insight into the security model of the project beyond theoretical aspects. The algorithm of scoring each of the candidates has been developed. The score is calculated based on the delegation of Bitcoin hash rate, timelocked Bitcoin vote support, and CORE stake. Candidates with the top 21 scores become validators for 200 blocks.

This should ensure that the validators match the current distribution of hash power, Bitcoin timelocking and CORE staking at a particular time point, rather than staying constant indefinitely. Slashing is another instrument that can be used against those validators that fail to comply with some certain conditions like block signing twice and being offline for an extended period of time. Slashing includes reduction of the amount of CORE staking and possible exclusion from the pool of active validators. Such penalties should motivate validators in terms of financial rewards.

Miners of Bitcoin, who delegate their hash power to the validators of Core, do not need to purchase special mining equipment in order to mine on Core network. In fact, the hash power generated as a result of their mining activity becomes a security signal used in Core’s election algorithm and helps establish the link between Core network and Bitcoin’s hash rate. Whether or not this mechanism can ensure the same degree of security as Bitcoin’s one is a technical issue and depends only on the amount of Bitcoin’s hash rate that can be eventually delegated.

Core’s Governance Structure and the Role of Core DAO

Decentralized autonomous organization (DAO) called Core DAO is responsible for governance of Core network and its further development. Core DAO manages all the decision-making processes related to the parameters of the network. Token holders of CORE, who delegate their tokens, are able to participate in voting on various decisions including transaction fees structure, validator requirements and token burning mentioned above.

Decentralized governance takes time to build, and the voting participation plays an important role when it comes to the actual impact of the voting structure as far as decentralization is concerned. The governance structure in which a minute proportion of the potential voters take part in voting is somehow different from the governance structure in which a larger part of token holders cast their votes. Monitoring the voting participation over time will help to see if Core DAO governance is decentralized to a certain degree.

The Core DAO has been introduced to the world as an initiative that is managed by the community, yet publicly reported contributions have been made by individuals like Brendon Sedo and CJ Reim in the creation of the project. Like most DAOs, it claims decentralization. When it comes to decentralized governance projects, it is very important to consider on-chain voting data as well as proposals that have been put forward throughout the history of the project.

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Core’s Growth Timeline Since Launch

Core’s mainnet was released on January 14, 2023, which means that the project has a few years of experience compared to some other Bitcoin aligned blockchain projects that do not have even one year yet. In the early stage of its development, the network worked on forming the validators’ set and launching DeFi applications and, at the same time, the price of CORE coins reached its peak within the first year after they became available for trade. According to tastycrypto sources, in Q3 2024 the amount of TVL on the Core increased dramatically.

Indeed, the above-mentioned TVL growth occurred simultaneously with the development of CORE ecosystem applications, such as Pell Network as a restaking tool, Colend Protocol as a lending platform, and COREx Network as a DEX activity hub. Reported numbers at different stages suggested that the total value locked by CORE was about 900 million dollars. In addition to this, millions of active wallets were reported to be interacting with the network. Such adoption rate, which occurred several years after the network was launched rather than within the first few months, indicates a longer adoption period compared to some younger competing networks.

However, CORE token’s price showed the completely opposite trend, plummeting to the lowest possible level right after its peak, despite the increase in TVL and usage metrics reported in recent times. This disparity between token price and usage metrics should be mentioned explicitly, as it represents an example of a concept mentioned earlier in this guide, according to which the early token price indicates speculative value rather than real value backed by the usage of the network. Evaluation of CORE based on the latter rather than on its token price provides the most complete assessment of the network’s current state.

Risks to Understand Before Using or Holding CORE

But it should be noted that any position in CORE faces its specific risks. It is worth noting that the cap on the number of tokens does not necessarily lead to high prices – Core’s performance on the market, beginning with 2023, is the evidence of it. Core uses its unique hybrid consensus algorithm, but unlike Bitcoin and Ethereum, its algorithm is not well tested yet.

Lack of trading availability at popular exchanges like Binance and Kraken may also influence the liquidity and price of the tokens. Furthermore, as for any decentralized finance protocol, the smart contracts’ risks are relevant to Core’s lending and restaking solutions as well.

Conclusion

While researching the concept of Satoshi Plus of Core for writing this article, it turns out that the three-layered consensus system is the sole piece of technical innovation when it comes to bridging the mining power of Bitcoin and an Ethereum Virtual Machine-compliant blockchain network. Core is, in essence, trying to solve the blockchain trilemma without giving up on anything.