Continue to delve into Lorenzo. The key issue is not that it has issued an asset called stBTC, but rather that it aims to solve the old problem of BTC's inefficiency on-chain. There used to be a saying in the market: ETH is an asset that can participate in economic activities, while BTC is an asset locked away in a cold storage, sleeping. This statement may sound like a joke, but it is essentially accurate—BTC has immense value, but its usability is indeed too weak.
The value of Lorenzo lies in breaking this 'inefficient' link, allowing BTC to no longer be just a 'bullish storage asset,' but to truly move on-chain, generate yields, provide collateral value, and participate in strategy portfolios. To make assets active, it often relies not on storytelling, but on whether there are people behind the scenes setting up the structure. Lorenzo is doing this, and is doing it more systematically than most BTC projects.
Many people may wonder, since BTC itself does not have staking or native yield, where does the yield from Lorenzo's stBTC come from? Its logic is not about creating yield out of thin air but integrating structured on-chain capabilities such as cross-chain yield, derivative yield, re-staking yield, and liquidity yield, transforming BTC from a 'single asset' into a 'yield composite asset.' You can think of it as turning BTC from an existence of 'only principal' into an asset pool that can generate cash flow.
Also because Lorenzo has standardized stBTC as an asset form, it has taken on the role of an 'entry asset' in the ecosystem—regardless of whether you are a lending protocol, doing perpetuals, creating structured products, or even a stablecoin issuer, you can directly use stBTC without worrying about the cross-chain or wrapped forms of BTC. As the project develops further, the value of standardized assets becomes increasingly apparent, which is also why ETH's LST will become one of the largest underlying assets in the entire DeFi space.
From a developer's perspective, Lorenzo is the kind of project that is 'friendly yet professional.' It does not throw complexity to the application layer but hides all the troubles within the protocol, allowing the application layer to directly use a stable, composable, and verifiable stBTC. This model will essentially make the entire BTCFi field easier to expand and will enable the emergence of genuine applications rather than remaining in the 'imagination phase' regarding BTC.
More importantly, Lorenzo chooses to be the 'foundation layer' for BTC assets, rather than creating a BTC public chain or a large integrated ecosystem. This is very crucial. History tells us: before an ecosystem begins, there must be standardized asset forms. The explosion of ETH's DeFi was due to the presence of standard assets like WETH, USDC, and LST; whereas BTC's ecosystem has historically struggled to start because 'the form of BTC on-chain has never been unified.' What Lorenzo is filling now is this gap.
From a macro perspective, mainstream capital has actually begun to re-focus on the capital efficiency issue of BTC. After all, BTC has such a large market cap, holders are mostly long-termists, yet the asset hardly generates any yield, which is actually unreasonable in capital market logic. Sooner or later, the market will need a set of tools to allow BTC to participate in financial structures, rather than remaining forever in the cycle of supply and demand games.
So Lorenzo's position is actually very special: it is neither a Layer2 solution nor a trading protocol; rather, it operates at a layer in the BTC ecosystem that 'truly has the ability to change the way assets operate.' In the future, whether you are dealing with RWA, derivatives, cross-border payments, or on-chain settlements, as long as you want to use BTC, when stBTC becomes a consensus asset, Lorenzo will become the outlet for BTC assets to flow on-chain.
From a long-term perspective, this route is not about chasing short-term trends but about building the financial foundation for BTC. It may be slow, but it carries significant meaning and belongs to that kind of infrastructure that becomes increasingly irreplaceable over time.
