As a BTC holder, are you tired of simply HODLing? Do you want to explore the possibilities of on-chain yields without giving up your Bitcoin position? The Lorenzo Protocol opens a new door to a new world for you. This article will guide you step by step on how to participate in the Lorenzo ecosystem as an ordinary user and plan your yield maximization strategy.
Step 1: Understand your 'toolkit'
In the world of Lorenzo, your principal is BTC, but you can use it in various ways:
1. Directly stake BTC: Cross-chain your BTC to the Lorenzo network for native staking. This is the most direct method, and you will receive lstBTC (Lorenzo liquid-staked BTC).
2. Use wrapped BTC: If you already hold assets like WBTC or tBTC, you can deposit them into Lorenzo to receive lstBTC in return.
3. Purchase lstBTC on the secondary market: You can directly buy lstBTC that others have minted on decentralized exchanges (DEX), quickly entering the ecosystem.
Step 2: Core operation - conduct 're-staking'
After obtaining lstBTC, the real magic begins. Log in to the Lorenzo Protocol platform and enter the re-staking interface:
1. Deposit lstBTC: Deposit your lstBTC into the re-staking smart contract.
2. Choose AVS portfolio: The platform will list all audited active validation service options. Each AVS has its description, risk level, and estimated yield rate. Don't put all your eggs in one basket! You can allocate your lstBTC to multiple different AVS to spread out risk. For example, you might allocate 40% to a data availability layer, 30% to a new sidechain, and 30% to an oracle network.
3. Confirm and authorize: After completing the allocation, confirm the transaction. The 'security' represented by your lstBTC will start working for the AVS.
Step 3: Harvest multiple yields
After completing re-staking, you will begin to automatically earn:
· Basic yield: Your lstBTC itself will accumulate staking rewards from the Bitcoin network (or the original staking protocol).
· $BANK rewards: This is the main compensation you receive for providing security to AVS, issued jointly by the protocol and AVS. This part of the reward is usually dynamic, depending on network participation and AVS demand.
· AVS native token airdrop: Many emerging AVS, in order to attract early security providers, often airdrop a portion of their native tokens as incentives to re-stakers. This could be an unexpected fortune.
Yield maximization strategy guide
1. Research AVS: There are both yields and risks. High-yield AVS may be new projects with higher risks. Carefully study the white papers, teams, and audit reports of each AVS. Prioritize those with real products, ecosystem partnerships, and thorough audits.
2. Utilize compound interest: Reinvest the $BANK rewards you receive. You can choose to sell $BANK for more lstBTC to re-stake, or stake $BANK to participate in network governance and obtain additional staking rewards.
3. Pay attention to ecosystem airdrops: Actively participate in governance voting, testnet activities, etc., in the Lorenzo ecosystem, as you may receive airdrops or point rewards from the protocol itself.
4. Dynamic balance: Regularly (e.g., quarterly) check the performance of your AVS portfolio. Remove poorly performing or risky AVS and rotate funds into newer AVS with more potential.
5. Safety first: Always use hardware wallets and confirm the contract address is correct. Only invest funds that you can afford to lose.
Summary
Through the Lorenzo Protocol, BTC holders have for the first time gained a systematic, composable yield enhancement toolbox. It is no longer just a simple 'earning interest on deposited coins', but has upgraded to an active 'security asset allocation'. Understand the rules, do your research, diversify risks, and you will be able to make the Bitcoin you hold unleash unprecedented productivity in this new land.
Would you prefer to allocate re-staked assets to high-risk, high-return emerging AVS or low-risk, stable legacy AVS? Why?
@Lorenzo Protocol #LorenzoProtocol $BANK
