@Lorenzo Protocol #lorenzoprotocol
Lorenzo Protocol's native token is BANK, which is used for governance, revenue, and utilizing the protocol's ecosystem. Lorenzo Protocol has created a platform that aims to bring the liquidity of Bitcoin and other coins into decentralized finance. This means that in addition to simply holding Bitcoin and other coins, we can use them for financial products, staking, yield generation, etc. We can understand this as earning income (yield) by staking and restaking Bitcoin and other coins, which maintains the liquidity of Bitcoin and other coins without requiring them to be held idle.
Decentralized Finance (DeFi), which is based on blockchain, provides users with direct access to services such as lending, borrowing, trading, and insurance. All of this is automated through smart contracts, providing transparency and global accessibility. For example, instead of using a traditional bank, we can directly borrow crypto on the blockchain. Lorenzo Protocol provides holders with liquidity staking tokens and structured yield tokens in exchange for staking, such as stBTC and enzoBTC, which can be used in decentralized finance applications, turning held BTC into a yield-generating asset. In this model, the tokens are divided into two parts: the principal, which includes stBTC/enzoBTC, and the yield, which is represented by yield-accruing tokens (YATs) or other yield-bearing representations.
Asset management, or on-chain asset management, is the management of financial assets directly on the blockchain. This process involves automating transactions, custody services, and portfolio rebalancing using smart contracts, while also maintaining an immutable record of every activity. Lorenzo is a blockchain-based asset management system where your investments and trading are handled by automated contracts. The infrastructure layer created by Lorenzo, which we call the Financial Abstraction Layer (FAL), transforms real-world assets into tokenized “On-Chain Traded Funds (OTFs)”. Through OTFs, traditional financial/CeFi-style products are brought into the DeFi space.
To make its ecosystem consumer-friendly, Lorenzo has forged several partnerships, allowing both small and large BTC holders to stake their BTC and receive liquid staking tokens (stBTC). This means that BTC can now be used as a yield-generating and liquidity-providing asset, rather than simply being held. Through a partnership with Babylon, Lorenzo has created its own Bitcoin liquid restaking platform. The Lorenzo protocol has also partnered with Bitlayer to integrate into Bitlayer's DeFi ecosystem, enabling Bitlayer users to utilize stBTC with DeFi yield, liquidity, and other features.
The Lorenzo protocol is a Bitcoin liquid staking and yield infrastructure whose greatest strength is its cross-chain or multi-chain expansion. Lorenzo is not limited to a single blockchain; it operates across multiple blockchains, Layer 2 solutions, and DeFi ecosystems. This allows BTC to be easily moved from one blockchain to another, enabling users to access yield, staking, lending, and other services with the same token. The protocol's goal is to bring Bitcoin into the entire DeFi ecosystem by making its BTC staking token multi-chain.
