Exclusive Interview with Bedrock Core Contributor Zhuling Chen: Focusing on Multi-Asset Re-Staking to Unlock Babylon's Liquidity Potential

Interviewee: Zhuling Chen, Founder of Bedrock

Interview and Author: Shaofaye123, Foresight News

Staking and re-staking have been hot topics of discussion. With numerous emerging projects appearing on major public chains, the market's exploration of digital asset liquidity has become increasingly fervent. Is it a panacea for market prosperity or a mirage of a false ecosystem? How can asset security and systemic risk be balanced? How can the liquidity dilemma of BTC be resolved?

From the Bedrock project, we discovered solutions to unlock Babylon's liquidity and saw the potential of the re-staking industry logic after abstraction. Bedrock began its journey in the staking and re-staking industry from Rock X, deeply cultivating this field for many years. To date, it has not only secured funding from OKX Venture and LongHash but has also gained recognition from Babylon's co-founders. Recently, it won the championship in the "BNB Incubation Alliance (BIA)" amidst fierce competition. How does it address the common systemic risks of re-staking? How does it balance returns and security? We engaged in an in-depth dialogue with the founder of Bedrock to explore these questions.

Starting from Industry Insights

Foresight News: Staking and re-staking have always been hot topics. As an industry participant, how do you view the impact of this field on the market?

Zhuling Chen: Let's start with staking. In fact, staking has existed for about five years, and we have been in this industry for almost the same duration. First, from the perspective of Token Holders, the impact of staking is very positive. In the traditional Proof of Work (PoW) model, holders merely act as custodians of assets without earning any returns from their holdings. In the Proof of Stake (PoS) model, staking can provide additional returns for holders, thereby incentivizing long-term asset holding and effectively reducing market sell pressure. From an institutional perspective, many institutions are entering the space, viewing staking as a risk-free asset allocation method to improve capital cost efficiency. The current scale of the staking market is approaching $100 billion. At the same time, staking also guides market interest rates, thus positively impacting lending. If lending rates are lower than staking returns, people will be more inclined to borrow and stake to capture the profit margin. I believe that after BTC is launched on Babylon, the lending rate will also rise.

Re-staking has become a new hot topic, gaining attention since last year. Its core appeal lies in its ability to transform large-scale blockchain assets into a secure economic guarantee for emerging services. It is somewhat similar to the joint mining model that emerged during the PoW era in 2014. In joint mining, participants contribute resources to innovate and secure the network, while re-staking introduces a penalty mechanism to balance and protect node security through multi-party games. This allows service and application developers to focus more on product development, providing economic incentives for stakers and supporting the security and sustainability of the entire blockchain ecosystem.

Foresight News: Many people currently question some risks associated with re-staking. How do you view this? Do you think re-staking has the potential to trigger systemic risks?

Zhuling Chen: When discussing risks, both staking and re-staking can be explored from three aspects. First, there is the safety of the principal. In the staking field, although many projects are still in the trial and exploration phase, the safety of the principal remains controllable. For example, the non-custodial forms of Babylon and EigenLayer ensure that no external institutions or individuals can arbitrarily withdraw funds, thus safeguarding the principal to some extent.

Secondly, we need to consider the riskiness of the staking mechanism. There are inevitably certain risks during the staking process. However, the risks brought by the penalty mechanism also serve as guarantees, ensuring that staking nodes do not act maliciously and maintaining node security and attack resistance. Choosing reputable and stable node providers, especially those that offer insurance protection for the network, can significantly reduce these risks.

Thirdly, we need to pay attention to the potential liquidations caused by excessive leverage. In the processes of staking and re-staking, if leverage is too high, it may trigger a chain reaction during market fluctuations, leading to systemic liquidations. For instance, if each node has a small risk exposure but is numerous, the cumulative effect could lead to significant losses. Therefore, controlling leverage and avoiding excessive leverage is an important risk control point in economic model design. As service providers, we have the responsibility to educate and guide users, helping them fully understand the risks involved in staking activities and take appropriate risk control measures. We will also establish our own risk control mechanisms to ensure that unnecessary risks do not arise from high leverage. While continuously exploring and increasing staking opportunities, we need to balance risk and security.

The Entrepreneurial Journey of Bedrock

Foresight News: Before founding Bedrock, what attempts did you and your team members make in other fields? How did this influence your subsequent entrepreneurship?

Zhuling Chen: Our team members have diverse backgrounds, most of whom entered the industry around 2016 or 2017 and have accumulated rich experience in various fields. Team members have independently developed PoS public chains and have experience with large wallets and custodial services. This has given us a deeper understanding and intuitive grasp of PoS public chain economic models, risk mechanisms, and asset security. Our team was officially formed in 2019, establishing Rock X, a company focused on PoS node services, dedicated to ensuring the security of all PoS blockchains and providing users with continuous staking returns.

Foresight News: You mentioned that the team previously operated as node operators. What competitive advantages does Rock X have as a well-known node service provider, and how has this influenced your subsequent entrepreneurship?

Zhuling Chen: Currently, the market for node operators is primarily concentrated in Europe and the United States, lacking expansion into the Asian market. We chose to deeply cultivate Asia, with a business scale reaching approximately $2 billion. Secondly, as a blockchain-native team, we have a deeper understanding of node services. We do not view it as simple cloud server management but analyze the characteristics of each blockchain more deeply. Sometimes we even modify the client to enhance service security and efficiency. Public chains are not necessarily perfect, and we hope to help users cope with the systemic risks that immature blockchain software may bring. Thirdly, we have service experience with over 30 public chains, which means we are not just serving a specific ecosystem but can meet users' needs across different sectors. We have rich experience with public chains like Solana and Cosmos, and we were among the earliest node operators to participate in Babylon. Fourthly, we provide a broader range of services, offering not only block-producing node services but also information node services. Our service targets not only actual blockchain participants but also developers, allowing us to better provide one-stop services to meet diverse needs. The technical expertise and experience our team gained from operating Rock X nodes have led us to focus not only on purely financial re-staking but also on capital security and business closure. Currently, we have gradually developed a capability system that is more closely connected with the blockchain ecosystem.

Foresight News: What prompted you to ultimately choose to establish Bedrock?

Zhuling Chen: In fact, in 2020 and 2021, we had already formally entered the liquid staking field, establishing partnerships with many asset management companies and custodial wallets, and we were also node operators for projects like Lido. Leveraging our competitive advantage in staking returns, we decided to found Bedrock last year after new ideas emerged. Bedrock is not driven by trading or lending; instead, it is committed to bringing blockchain-native staking returns to users and integrating these returns into the ecosystem, achieving modularization while ensuring the secure and stable operation of all blockchains.

Competitive Advantages of Bedrock

Foresight News: Why did Bedrock choose to develop a multi-chain LST protocol, and which assets does it currently support?

Zhuling Chen: The current staking market typically operates based on specific processes, while we hope to abstract the logic of the entire staking industry, which is why we chose to enter the multi-chain LST space. Bedrock actually started with ETH LST and has been operating normally for over a year. Now, it has gradually evolved from a standalone ETH LST to ETH LRT and a multi-asset LST protocol, currently supporting three major uniTokens: ETH, wBTC (other wrapped BTC), and IOTEX (DePIN). We believe that in the next 2 to 5 years, staking will not be limited to a single asset or specific protocol. Therefore, we have considered the choice of assets, initially laying out ETH, BTC, and IOTEX. Ethereum, as the largest smart contract platform, can provide diverse services through staking. Bitcoin, as the largest asset in the market, has significant advantages in staking security and scale. The DePin track also urgently needs staking services, requiring a secure economic model to ensure operation. These assets will become the main direction for staking in a few years, and we hope to enable users to participate in this early layout.

Foresight News: There are many popular projects in the staking and re-staking field, such as EigenLayer and Babylon. What is the relationship between Bedrock and them, and how do you achieve differentiated competition?

Zhuling Chen: First of all, EigenLayer and Babylon are not competitors to us at all; they are more like partners. We can bring them more economic volume, generating more staking transactions for mutual benefit. We complement each other. Secondly, there are indeed some projects in the market that are similar to us. Besides the advantage of multi-asset re-staking, we can elaborate on two points. First, from the perspective of staking income, many teams adopt relatively aggressive methods, mainly generating income by issuing liquidity tokens and trading them on DEXs. However, for us, this is only half of the income. Besides the issuance and trading of liquidity tokens, the ultimate real income still depends on node operation capabilities, which is our strong suit. Secondly, our level of decentralization is also relatively high. We hope the entire protocol operates entirely on-chain, utilizing smart contracts to ensure that all operations are transparent and verifiable, avoiding the risks associated with centralization.

Foresight News: You previously mentioned your relationship with Babylon. Will you continue to focus on BTC staking? What is the current focus of your team's work?

Zhuling Chen: Our recent focus is on the BTC staking field. We are very honored to have established contact with the Babylon team early on, participating in technical feedback and testing support since the project's inception. We have maintained a close collaborative relationship in some important meetings, jointly discussing and solving key technical issues, especially regarding the assurance of capital security. We have in-depth discussions with their technical team weekly, exploring how to ensure the safety of the principal and develop reasonable economic models. The investment from Babylon's co-founder is a significant recognition for us. With the Babylon mainnet set to launch soon, our focus has shifted more towards BTC staking, which has been running for about a month and has attracted a large number of users. At the same time, we have established partnerships with multiple wallets. We hope to align with Babylon's launch to guide users in establishing new ways to use BTC and achieve further development in the staking field.

Foresight News: Regardless of the time, asset security is always the primary concern for stakers. How do you ensure the security of user assets?

Zhuling Chen: Currently, BTC cannot be fully managed through smart contracts, so stricter security measures need to be taken. To ensure asset security, we chose to collaborate with the largest and most trusted BTC custodial solution in the market. This means we do not have the authority to transfer users' BTC; their BTC is stored in a third-party custodial institution that is recognized and verified by the market. We are only responsible for helping users stake and generate returns. This design of authority separation ensures asset security, as we cannot directly control users' assets. Additionally, we implement various security measures during the staking process. For example, we eliminate single points of failure in internal processes, ensuring that operations cannot be completed by a single individual, and we also introduce external verification mechanisms to prevent risks caused by human errors or system vulnerabilities.

Foresight News: Besides security considerations, returns are also a topic of great concern for many users. How do you balance and design this?

Zhuling Chen: We hope that more real users can participate, and in our design, we aim to lower the barriers for user participation while providing higher returns. We do not set thresholds for staking funds; regardless of the scale of funds, large or small, anyone can participate. In terms of return distribution, we will not distribute airdrops solely based on the scale of funds but will seek a balance among the number of participants. Currently, Bedrock is in its early stages, and participants will gain more potential returns. Our final return distribution will depend on the overall distribution of users. Through this approach, we hope to provide fair participation opportunities for users of different scales, allowing more real users to engage.

Conclusion on Future Development

Foresight News: What stage is the project currently at? Can you share about current collaborative projects, industry activities, and the ecological landscape?

Zhuling Chen: We are currently in the user growth stage, hoping to attract more users and projects to participate in our ecosystem. The current capital scale is approximately $200 million. We plan to launch more features to meet user needs. To provide users with more DeFi application scenarios, we have begun building some liquidity for DEXs and assets for lending platforms, and we have launched a rate trading market similar to Pendle to allow users to lock in returns in advance. We are pleased to have recently won the championship in the BNB Chain hackathon. We have also secured investments from Babylon co-founders, OKX Venture, LongHash, and others.

Foresight News: You have not only received funding from institutions like OKX Venture and LongHash but also investments from the c98 community, Amber Group, and Babylon co-founders. What future do you think they are investing in? How do you attract and select investors?

Zhuling Chen: Their investments in the future are primarily a recognition of market scale. The blue ocean market for BTC has not yet been fully developed, and the market needs to release BTC liquidity. Secondly, it is a recognition of our node operation and technical capabilities. We align more closely with these institutions in pursuing safety and decentralization. Additionally, angel investors have gained a real sense of the team's strength through daily collaboration with our project, believing that the team has the ability to navigate through bull and bear markets. Communities typically focus more on decentralization and sustainability of the ecosystem. I believe they invest in us because Bedrock has such developmental potential for the future. When selecting investors, we hope they not only have broad recognition in the industry but also place a high emphasis on safety to mitigate issues arising from aggressive and high-risk approaches, aiming to collaboratively build a sustainable ecosystem.