In today's article, I want to shift the focus away from us retail investors for a moment and take you to see what those project teams battling in the Bitcoin Layer 2 arena are most anxious about right now.
If you have recently followed the Bitcoin ecosystem, you would have noticed a peculiar phenomenon of 'infrastructure oversupply'. Overnight, hundreds of Layer 2 solutions based on BitVM, EVM compatibility, and sidechain technology have emerged. Everyone's white papers are beautifully written, with high TPS and low Gas. But when you actually cross-chain to take a look, you will find that many blockchains are simply 'ghost towns'—the roads are wide, but there are no cars, and even less money.
This is the biggest pain point in the current Bitcoin ecosystem: lack of liquidity. Here, the 'water' refers to Bitcoin's liquidity.
For any emerging Layer 2, solving the 'cold start' problem is a matter of life and death. They urgently need real BTC to come over, support TVL (Total Value Locked), and allow the DeFi protocols above to operate. But for Bitcoin holders, transferring their immensely valuable BTC to a newly launched chain that has only been online for a few days, or even one whose code has not been tested by time, is like joking with their life savings.
This deadlock of 'the project party wants us to provide, but we dare not give' precisely creates Lorenzo Protocol's extremely unique ecological niche— it is the most popular 'water supplier' in this battle of a hundred chains.
The reason I am particularly optimistic about Lorenzo at this stage is that it has shown strong unification value in the B-end (enterprise/project side). If you take a close look at Lorenzo's partner list, you'll find that it has almost connected all the mainstream and non-mainstream Layer 2 currently available in the market.
Why are these competing chains willing to cooperate with Lorenzo?
Because Lorenzo provides a type of 'safely washed liquidity.'
You can think of Lorenzo as a huge, high-credit water reservoir. It first safely absorbs users' BTC through Babylon's shared security mechanism and its own treasury technology, encapsulating it into stBTC. Then, it delivers these stBTC to various Layer 2s that urgently need funds, just like laying a tap water pipeline.
In this process, Lorenzo helped Layer 2 solve the most troublesome 'trust cost' issue.
For new projects on Scroll, Bitlayer, or BNB Chain, connecting to stBTC is equivalent to directly introducing assets at the level of the Bitcoin mainnet. They don't need to struggle to develop a cross-chain bridge that no one dares to use, nor do they need to beg large holders to migrate assets one by one. As long as they connect to Lorenzo's pipeline, liquidity will flow in like tap water.
For us users, this model gives us a 'God's perspective.' We don't need to study whether every newly launched Layer 2 is reliable; we only need to trust the layer of protocol provided by Lorenzo. As long as we hold stBTC, one day in the future, if a new emerging Layer 2 explodes and there is a hundredfold profit mining opportunity, we can enter the market with stBTC; if that chain fails, we can also retreat at any time, after all, the safety of the underlying assets is guaranteed by Lorenzo and Babylon.
This role of 'liquidity distribution network' allows Lorenzo to become the busiest hub in the ecosystem even without personally engaging in DEX or lending.
In the gold rush, those selling shovels made the most money; during the urbanization process, those laying water, electricity, and gas are the most stable. The current battlefield of Bitcoin Layer 2 is in a period of chaotic war among lords. Who can laugh last is still uncertain, but whoever wins will need liquidity and BTC assets. Lorenzo’s approach, which not only does not take sides but instead provides 'ammunition' to everyone, is undoubtedly the most sophisticated survival wisdom.
Therefore, when we assess Lorenzo's value, don't forget to add this layer of 'industry dependency'. It is becoming the USDT in the Bitcoin ecosystem—not because it is a stablecoin, but because it has become an infrastructure that everyone cannot do without.
