Lorenzo Protocol (BANK) is a project aimed at unlocking the potential of Bitcoin in the decentralized finance world. Below, we outline its technical team, application scenarios, and characteristics compared to similar projects.
Core Team and Background
Lorenzo Protocol was co-founded by Matt Ye and Fan Sang.
• Matt Ye, as the founding member of the project, has a rich background in quantitative trading and was a software engineer at the renowned U.S. quantitative hedge fund Akuna Capital. He graduated from the University of Illinois at Urbana-Champaign, Fudan University, and the National University of Singapore. The project's operations director, Tad Tobar, was previously the operations director of the public chain project ZetaChain and graduated from the University of California, Berkeley, and the University of Oxford.
• The team demonstrates strong resource integration capabilities, and the project has secured strategic investments from top investment institutions, including Sequoia Capital, a16z, and YZi Labs, with seed round financing amounting to $30 million. This also reflects the market's recognition of its vision and the team's execution capabilities.
Main application scenarios
The core goal of Lorenzo Protocol is to activate idle Bitcoin assets, allowing them to generate interest and flow in the DeFi ecosystem. Its main application scenarios revolve around several aspects:
• Bitcoin liquid staking: This is the most basic function of Lorenzo. Users can stake Bitcoin (including native BTC, BTCB, etc.) through the protocol and receive liquid staking tokens stBTC representing the staked principal and rights tokens YAT representing future earnings. In this way, users obtain the underlying returns from Bitcoin staking while being able to use stBTC and YAT to participate in other DeFi activities, solving the liquidity problem of assets being 'locked up' in traditional staking.
• Building a complex Bitcoin DeFi ecosystem: Lorenzo is not limited to simple staking. The issued stBTC aims to become a universal earning Bitcoin asset that can be integrated into various DeFi protocols for lending, as collateral, participating in liquidity mining, and more. At the same time, the unique YAT token provides the possibility to build more complex financial products, such as interest rate swaps, structured income products, and even insurance products, catering to the needs of investors with different risk preferences.
• Moving towards 'on-chain investment banking': Financial abstraction layer. In a broader vision, Lorenzo plans to become a bridge connecting traditional finance and decentralized finance. By building a financial abstraction layer, it aims to package complex traditional financial strategies (such as RWA asset returns, stablecoin arbitrage, etc.) into standardized, tokenized products that can be freely traded and combined on-chain, similar to ETFs in traditional finance. This allows applications like wallets and digital banks to easily provide rich earning services to their users.
Comparison with projects in the same field
To more intuitively demonstrate the position of Lorenzo Protocol in the same field, the table below compares it with several representative Bitcoin re-staking/earning projects:
Summary and Outlook
Overall, the advantages of Lorenzo Protocol lie in its top-notch team background, strong capital support, and grand vision for building a rich Bitcoin financial ecosystem. Its dual-token model and financial abstraction layer concept provide it with immense imaginative space.
However, it should also be noted the challenges it faces. Firstly, its development largely depends on the smooth launch and development of the underlying infrastructure Babylon mainnet. Secondly, the CeDeFi model it adopts introduced centralized trust assumptions in the early stages for security and efficiency, which entails a certain trade-off with the spirit of DeFi's 'trustlessness'. Finally, the competition in the Bitcoin DeFi space is fierce; whether Lorenzo can stand out among many projects depends on the speed of its technological implementation and ecological development.
