In today's article, I want to discuss a topic that truly touches the core of DeFi power. If you still regard $BANK merely as a 'governance token for voting,' or simply as a 'dividend certificate' waiting to be repurchased and destroyed, then you may be underestimating the spectacular event that will unfold in the future Bitcoin ecosystem — the 'liquidity war.'
As we review the history of DeFi, you will find an interesting phenomenon: the most valuable protocols are often not those with the highest yields, but those that possess the 'distribution rights.' The reason why Curve was able to trigger the famous 'Curve War,' causing major stablecoin projects to fight fiercely, is that it held the baton of liquidity. Whoever holds the governance rights of Curve can guide huge amounts of funds to their own pools.
The current Bitcoin Layer 2 battlefield is reminiscent of the stablecoin melee of years past.
What do you see in the market with dozens or even hundreds of Bitcoin L2s? What they lack the most is real BTC assets. Without BTC crossing over, their chains are just empty cities; no matter how advanced the technology, it doesn't matter. The current positioning of the Lorenzo Protocol is a huge, standardized BTC liquidity reservoir.
This introduces the strategic value of BANK: it is the 'tap switch' of this reservoir.
I've been contemplating Lorenzo's economic model and found it buried a deep hidden line. As more L2s and application chains connect to Lorenzo, everyone wants more stBTC to flow into their ecosystem, as this means higher TVL and stronger security. So, why should Lorenzo direct precious liquidity to Chain A instead of Chain B?
At this time, $BANK the coin holder has become the person sitting in the main position at the negotiation table.
Moreover, let's calculate an economic account. Lorenzo operates a 'toll' business. Every BTC staked, every stBTC cross-chain, and every YAT transaction generates friction costs and fees at the base level. If there are tens of billions or even hundreds of billions of dollars running on it, even if only a tiny fraction is taken, it adds up to astronomical figures.
And $BANK is the container that carries this part of 'systematic returns'. Unlike those pure Meme coins that rely solely on emotions, its value support comes from the prosperity of the entire Bitcoin DeFi ecosystem. The more active Bitcoin is, the busier Lorenzo gets, and the deeper BANK goes.
So, my perspective on Lorenzo has elevated from simply a 'financial tool' to 'infrastructure control'. If you believe that the Bitcoin ecosystem will grow towering trees like Ethereum in the future, then as the pipeline delivering nutrients to the roots, Lorenzo is certainly an indispensable part. And holding its tokens is essentially an investment in this emerging economy's 'tax rights' and 'distribution rights'.
In this circle, there are two ways to make money: one is to fight on the battlefield (arbitrage, trading coins), and the other is to sell water and shovels to those fighting. Lorenzo is clearly the latter, and what it sells is the most scarce resource on the entire battlefield—liquidity. When we shift our focus from short-term candlestick charts to think about who controls the flow of funds, you might understand why some chips are worth holding through cycles.
