★How Lorenzo Protocol Tokenizes Bitcoin Staking★
Tokenized staking is a rather new paradigm in bitcoin, as bitcoin staking itself was only recently made possible by the introduction of Babylon. Now that Babylon exists as a basic infrastructure tool for bitcoin staking, separate protocols can be used to tokenize that stake and provide stakers access to the liquidity that is tied up at the Babylon layer.
Lorenzo Protocol is leading this sector, introducing the novel concept of dual staking deposit tokenization with its Liquid Principal Token (LPT) and Yield Accruing Token (YAT) standards, setting the stage for diverse yield earning opportunities for BTC holders.
Let’s dive into how the system works.
Bitcoin Liquid Staking Plans And Their Liquid Staking Tokens
The first step towards bitcoin staking tokenization in Lorenzo Protocol is choosing a bitcoin liquid staking plan (BLSP), as the parameters of the tokenization will depend on the chosen BLSP. At its core, a BLSP is simply the staking plan that has been chosen by a bitcoin staker in Lorenzo Protocol. Different plans involve different agreements in terms of properties such as where the user’s bitcoin will be staked and the staking duration period.