Bitcoin keeps evolving, and what was once thought impossible is now a reality. Smart accounts are bringing new ways to use Bitcoin, like staking BTC while keeping it native to the network.
One project leading this change is Coffer Network, a smart account system designed for Bitcoin. Over the past week, the total value locked (TVL) in Coffer has nearly doubled, showing strong interest. But what exactly is Coffer Network, and how does it work? Let’s break it down.
What is the Coffer Network?
Coffer Network is a smart account system for Bitcoin that lets users do more with their BTC while keeping full control of their funds.
Source: Coffer Network
Unlike traditional wallets, which require a single private key, Coffer uses multi-signature scripts to make Bitcoin management more flexible and secure.
It works similarly to Gnosis Safe on Ethereum but is built specifically for Bitcoin, allowing users to interact with new financial tools without moving their BTC off the network.
The idea behind Coffer is simple: make Bitcoin more usable while keeping it decentralised. One of its main features is the free smart accounts, which give Bitcoin holders an extra layer of security and control over their assets.
Users can also earn on their BTC in different ways, such as through cross-chain farming or by using their holdings for yield-generating opportunities. These features allow Bitcoin to be put to work, rather than just being stored in a wallet.
Coffer is designed to stay true to Bitcoin’s original principles, where users don’t have to trust a third party, and they can always withdraw their BTC whenever they want. There are no centralised controls, and everything runs through Bitcoin’s existing security mechanisms.
For developers, Coffer provides an SDK that makes it easier to build on top of this system. Projects can integrate smart accounts, create new apps, or add Bitcoin-based financial tools to their platforms.
To ensure security, Coffer undergoes regular audits to verify that everything works as expected and that user funds remain safe.
Beyond individual users, Coffer also connects to the BitcoinFi market, making it possible to explore yield opportunities across multiple networks while keeping Bitcoin at the centre of everything.
How Does a Smart Account Work on Coffer?
Coffer’s smart account is a multi-signature Bitcoin wallet designed to give users more control and security while enabling new ways to use their BTC.
Source: Coffer Network
Unlike regular wallets, which rely on a single private key, Coffer’s accounts use Bitcoin’s built-in multi-signature system to manage transactions.
This allows for features like spending conditions, automated approvals, and enhanced security without relying on third parties.
With a Coffer smart account, Bitcoin holders can do more than just store their BTC. They can stake their Bitcoin, access cross-chain opportunities, and interact with decentralised financial tools while keeping their funds secured by Bitcoin’s network.
The smart account ensures that users always have control over their assets, meaning they can withdraw their Bitcoin at any time without restrictions.
Another key advantage is security. By using multi-signature scripts, Coffer reduces the risk of losing access due to a lost private key. Users can set up recovery options and customise how their funds are managed.
This makes Coffer’s smart account a safer and more flexible way to use Bitcoin while staying true to its core principles of self-custody and decentralisation. It is not just a wallet but a way to make Bitcoin more functional without compromising security.
What is the coBTC Token?
coBTC is a non-custodial Bitcoin token built on Coffer Network that allows users to earn on their BTC while keeping full control.
Unlike traditional wrapped Bitcoin solutions that require a central entity to hold users’ BTC, coBTC operates through multi-signature security, meaning Bitcoin remains in the user’s hands at all times.
It also offers a permissionless exit, ensuring that users can withdraw their Bitcoin whenever they choose without restrictions.
A key feature of coBTC is its staking system, which lets Bitcoin holders earn rewards while maintaining ownership of their BTC.
Source: Coffer Docs
To stake, users lock their Bitcoin in a 2-of-3 multi-signature account, where the user, Coffer Network, and a third party serve as signers.
This ensures that funds remain secure while still being used to generate returns. As part of the process, users pledge 0.1% of their Bitcoin as a security deposit. If they follow the staking terms, they receive this amount back along with their rewards.
However, if they withdraw their Bitcoin early, the 0.1% is slashed and sent to the treasury, while the rest of their BTC remains untouched. Users can always start staking again by creating a new contract.
coBTC is also compatible with multiple networks, using the ERC-20 standard to integrate with decentralised finance ecosystems beyond Bitcoin. This allows users to interact with DeFi applications while still maintaining full control over their Bitcoin.
Source: DeFiLlama
Coffer Network has seen significant growth, with its total value locked now at 250 million dollars, reflecting increasing adoption and trust in the system.
With plans to further decentralise key functions like minting and burning coBTC, the project is innovating to give users even greater control over their Bitcoin.
What Can You Do with It?
coBTC allows Bitcoin holders to stake their BTC, earn yields, and use it across decentralised finance applications while keeping full control of their funds.
Since it operates through multi-signature security, users can interact with financial tools without handing over their Bitcoin to a third party.
Staking Bitcoin
- Users can stake their BTC by depositing it into a multi-signature staking account.
- A 0.1% pledge is required as a security deposit.
- If the staking terms are met, the pledged BTC is returned along with staking rewards.
- If users withdraw their Bitcoin early, the 0.1% is slashed and sent to the treasury, but the rest of their funds remain unaffected.
Using coBTC in DeFi
- coBTC follows the ERC-20 standard, making it compatible with Ethereum and other EVM-based networks.
- It can be used in liquidity pools, lending protocols, and cross-chain farming.
- Bitcoin holders can earn yields on their BTC across multiple networks without losing access to their funds.
Accessing the BitcoinFi Market
- coBTC is part of Coffer Network’s BitcoinFi market, which connects Bitcoin holders to different financial opportunities.
- Users can generate returns on their BTC while ensuring it remains under their control.
By combining staking, DeFi compatibility, and BitcoinFi access, coBTC provides new ways to use Bitcoin while staying non-custodial and secure.
Does It Have a Token Yet?
As of now, Coffer Network has no official token, and there has been no confirmation of a planned launch. However, the project has received backing from several well-known investors and venture capital firms, which often indicates a potential token release in the future.
Source: Coffer Network
Coffer Network’s backers include Draper Associates, Boost VC, Sats Ventures, Bob Network, ViaBTC, Core DAO, and UTXO Management.
These firms invest in blockchain projects with strong potential, and some have previously supported projects that later introduced tokens. ViaBTC, for example, is the third-largest Bitcoin mining pool globally and has invested in Coffer’s development, adding credibility to the project.
Despite these strong backers, there is no publicly available data on the exact funding amount or valuation of Coffer Network. This makes it difficult to estimate the potential value of a token if one were to be launched.
Typically, funding details help gauge the scale of investment and the possible market capitalisation of a future token, but in this case, the lack of information means there are no clear indicators.
While a token launch remains a possibility, given the nature of the project and its investors, there is no official confirmation, roadmap, or timeline for such a move. Anyone interested should stay updated through official channels for any announcements.
Conclusion
Coffer Network introduces smart accounts for Bitcoin, allowing users to stake BTC, earn yields, and access decentralised finance applications while keeping full control of their funds.
The project has received backing from several investors, but there is no confirmed token launch at this time. Its total value locked has reached $250 million, reflecting increasing usage. Since no public funding details are available, the potential value of a future token cannot be determined.