If we are to talk about which projects are genuinely addressing the fundamental issues of the Bitcoin ecosystem recently, the Lorenzo Protocol is certainly one of them. Its direction does not rely on shouting concepts, nor is it just joining the hype of 'BTC narrative', but rather it goes straight to the core: bringing Bitcoin assets into an efficient, freely applicable DeFi environment, and allowing the earning potential of BTC to be unleashed, rather than remaining forever in cold wallets 'lying quietly'.
The most critical step for Lorenzo is the launch of stBTC as an asset. Simply put, it helps users turn BTC, which would originally just sit idle, into a form of asset that can flow on-chain, participate in strategies, generate yields, and still maintain value stability. It's not just a matter of 'packaging it up' simply, but rather combining the security, hierarchical structure, cross-chain capabilities, and yield generation of BTC into a new asset form.
The core logic behind it is LRT (Liquidity Re-staking). Ethereum has LSD and LRT, turning ETH's income into combinable assets; Lorenzo brings the same logic to Bitcoin, but with a more complex mechanism because BTC itself lacks smart contracts and native income. Lorenzo's approach is equivalent to connecting BTC to a more flexible income model, suddenly giving BTC holders the ability to have 'an additional layer of financial attributes'.
This is also why I think Lorenzo's value lies not in the narrative but in 'expanding the utility boundaries of BTC'. Previously, when discussing BTCFi, everyone focused on tokenizing BTC, cross-chain actions, and bridging in and out, but there are very few projects that can truly transform BTC into a self-cycling and strategy-stacking asset. The combination of stBTC and LRT is a direction that can genuinely enhance BTC's efficiency across several dimensions.
From a DeFi perspective, to have an asset that can operate on-chain, it must meet several criteria: be able to participate in lending, be able to engage in liquidity, be able to combine income strategies, have a transparent risk structure, and cross-chain must be controllable. Lorenzo has designed these points to be packaged well, allowing stBTC to represent the base BTC value of users while also participating in the entire chain's strategy and liquidity network.
Looking again at the ecological side. Assets like Lorenzo are heavily dependent on developer friendliness and whether they can form an 'asset center'. Currently, Lorenzo's strategy is to allow stBTC to flow across multiple chains and be combinable within more protocols, which is crucial for new tracks like BTCFi. The more usage scenarios there are for the asset, the easier it is for the ecosystem to form a positive cycle, and the easier it is to bring more BTC onto the chain.
Moreover, Lorenzo's route will not be stuck in short-term plays like 'issuing coins based on hype'; it is more about creating a long-term foundational layer for BTC assets. Bitcoin's market value is there, funds want to come in, but previously there were no 'good tools'. If Lorenzo can make BTC generate liquidity income, strategic income, and combinable income like ETH, then what it does will be more substantive than most 'BTC public chains'.
In the long run, I believe Lorenzo's greatest significance is that it gives the Bitcoin ecosystem the opportunity to break free from the positioning of 'only a store of value' and transform into a new financial system that can continuously flow and create income. Theoretically, once this direction is opened, on-chain use cases for BTC will grow exponentially.
What Lorenzo Protocol is doing is not a gimmick, but rather taking something very basic yet very difficult—injecting BTC into DeFi and generating real income—and bringing it into reality. If Bitcoin is really going to enter the next stage, this kind of infrastructure is essential.
