“You’re no longer just holding Bitcoin — you’re earning yield on it,” said David Mass, co-founder of Hydrogen Labs, in an interview with TheStreet Roundtable. According to him, transactions running through the network generate returns, and depositors receive a portion through special contracts.

Until now, staking has been a key component of decentralized finance (DeFi) for networks like Ethereum and Solana. But now, this opportunity is opening up for Bitcoin as well. Mass emphasizes that this is a “generational opportunity” for Bitcoin holders to earn from their assets.

Hydrogen Labs is working on building a liquid staking system for two networks: Monad and Botanix. The latter is a layer 2 (L2) solution for Bitcoin that scales by integrating with Ethereum’s infrastructure and attracting Bitcoin-based assets.

Liquid staking allows users to receive tokens that represent their staked assets, which can be traded or used in other DeFi products. This gives investors flexibility that traditional staking lacks.

“Many institutional players will come in through custodians like Anchorage or BitGo. Access is limited for them today, but participation is only a matter of time,” added Mass.