Previously, when chatting with friends about earning interest on BTC, everyone's first reaction was not about how much profit it would bring, but rather, 'Is this centralized institution reliable?' From certain exchanges to various CeFi financial management platforms, there are already enough examples of failures. The balance on the account interface may look fine, but the assets behind it have long been used for high-risk operations, ultimately leading to a hasty conclusion with just an announcement. I later started to seriously explore the Lorenzo Protocol, simply because it moves many things that were originally hidden in the background onto the blockchain, at least letting me know what my coins are doing.
The basic path of Lorenzo is actually not hard to understand: users deposit BTC-related assets into the protocol and receive a liquidity certificate representing the staked position. This certificate can continue to participate in lending and market-making in DeFi; the underlying protocol uniformly allocates these BTC to pre-designed yield strategy combinations. The interface clearly indicates the general direction of the current main position, and even if it doesn't break down every transaction for you, at least you can distinguish between 'this is a relatively stable interest rate strategy' or 'this is an Alpha strategy with some directional risk,' and you won't be misled by the term 'comprehensive yield pool.'
Compared to traditional CeFi BTC wealth management, the key difference is that the counterparty risk structure is completely different. Previously, when you gave your coins to a platform, you were essentially giving a credit note from that platform; now when you lock your coins into Lorenzo, the main risks you face are the smart contract risks and the risks of the strategy itself, both of which can be partially verified through open-source code, audit reports, and on-chain data. More realistically, when problems arise, the flow of funds on-chain is visible, and you won’t encounter that extreme scenario of 'the platform says it's gone, so it's gone'; at least this step of tracing won't be blocked.
Of course, when it comes to yields, it’s inevitable to compare with competitors. Some BTC yield protocols will highlight 'super high annualized returns', but upon closer inspection, you'll find that they either rely on very high external incentives or have thrown funds into extremely volatile DeFi pools, looking good in the short term, but whether they can withstand volatility in the long term is a question mark. Lorenzo's strategy is more about 'squeezing out existing opportunities within safe boundaries': it won’t start off with extreme leverage, but instead, through structural design, allows the same BTC to rotate among several relatively stable paths. Expecting it to maximize daily returns may not be realistic, but if what you want is 'a bit more than just hoarding coins, and a lot less of the heart-stopping risks of high-risk mining', it's tuned in that direction.
Currently, there are many narratives surrounding BTC: some are looking at spot ETFs, some are focused on Layer 2 ecosystems, and others are watching the Lightning Network and payment implementations. Lorenzo can be considered to be on the 'yield layer' track, filling in a blank piece of the puzzle for Bitcoin holders. You don't necessarily have to hand over your entire position for it to manage, but you can certainly try using a portion of your BTC to create an 'on-chain salary account', checking the yield curve and position health periodically, while also pushing yourself to learn more about DeFi strategies.
For me, a more important change is a shift in mindset: in the past, I would instinctively get nervous as soon as BTC left self-custody wallets; now, with the portion of my position on Lorenzo, at least I know where the contracts are and how the strategy generally operates. When actual volatility occurs, I can use data rather than feelings to decide whether to stay. This visibility itself is a form of value. @Lorenzo Protocol #LorenzoProtocol $BANK
