Lorenzo Protocol’s stBTC versus enzoBTC represents a subtle design choice that addresses a significant issue in BTCFi: the confusion arising when a single token attempts to both "earn" and "spend" simultaneously.
stBTC is the component designed for earning yield. Consider it a stake receipt—a token that signifies BTC locked into a staking or yield-generating process. Its purpose is performance. You hold it to grow your BTC over time. While it can be used in DeFi, it functions more like an interest-bearing deposit: productive, but not the best choice for straightforward settlement.
enzoBTC is the cash-like component. It's a wrapped, 1:1 representation of BTC, intended for smooth transactions across DeFi platforms: for swaps, routing, liquidity pools, integrations, and any application that requires "plain BTC." Its aim is simplicity and composability, not yield generation.
The reason for separating them? Combining these functions typically causes difficulties. Tokens that generate yield can trade at slight premiums or discounts, especially under pressure, and they often include additional programmatic features that not all protocols are equipped to handle. By separating the "earning mechanism" (stBTC) from the "liquidity infrastructure" (enzoBTC), Lorenzo simplifies BTCFi. Your earning position remains focused on yield, and your spendable BTC stays reliable.
A practical comparison: stBTC is BTC optimized for performance. enzoBTC is BTC optimized for settlement. With these roles clearly defined, BTCFi strategies become clearer—you can choose when to pursue yield and when you simply need BTC-like cash on-chain.
#LorenzoProtocol @Lorenzo Protocol $BANK
