Unlike standard staking models, Lorenzo introduces a dual-token structure similar to zero-coupon bonds in traditional finance. By separating Bitcoin into Liquid Principal Tokens (LPTs) and Yield Accruing Tokens (YATs), they allow users to hedge risk or speculate on yield independently.
This provides a level of financial granularity previously unseen in the Bitcoin ecosystem. It allows institutional players to manage duration risk while retail users can simply hold for yield. This is the financial engineering required to bring the next trillion dollars of liquidity on-chain.
