Lorenzo Protocol is built on a simple but radical premise: the most powerful financial strategies in the world should not be locked behind hedge funds, opaque institutions, or privileged access. They should be programmable, transparent, and available to anyone with an on-chain wallet. Lorenzo is not trying to replace DeFi primitives like AMMs or lending markets; it is building a full-spectrum asset management layer that brings traditional finance strategies on-chain through tokenized products designed for composability, automation, and scale.
At the heart of Lorenzo Protocol is the concept of On-Chain Traded Funds, or OTFs. These are tokenized fund structures that mirror the logic of traditional ETFs, hedge funds, and structured products, but operate entirely on-chain. Each OTF represents exposure to a defined strategy rather than a single asset. When a user holds an OTF token, they are not betting on a token price — they are holding a dynamically managed portfolio governed by transparent rules, automated execution, and auditable performance. This transforms passive holding into strategy-based ownership.
Lorenzo’s OTFs are designed to cover a wide spectrum of financial approaches. Quantitative trading strategies leverage algorithmic models to exploit market inefficiencies, momentum, or statistical arbitrage opportunities. Managed futures strategies allow exposure to directional bets across multiple markets with systematic risk controls. Volatility strategies monetize market uncertainty through structured positioning rather than directional speculation. Structured yield products combine multiple instruments to generate predictable income streams while managing downside exposure. All of these strategies, traditionally gated by capital requirements and institutional relationships, become accessible through a single on-chain token.
Under the hood, Lorenzo organizes capital using a dual-vault architecture: simple vaults and composed vaults. Simple vaults act as direct execution containers. Capital deposited into a simple vault follows a clearly defined strategy with minimal abstraction, making performance, risk parameters, and asset flows easy to audit. These vaults are ideal for straightforward strategies or single-model execution paths.
Composed vaults sit one layer above, acting as intelligent routers of capital. They aggregate liquidity from multiple simple vaults and allocate it dynamically based on predefined logic, performance metrics, or risk constraints. This modular design allows Lorenzo to construct sophisticated multi-strategy products without sacrificing transparency. Capital can flow between strategies automatically, rebalancing exposure as market conditions change. This is asset management expressed as code, not discretion.
A key strength of Lorenzo Protocol is its commitment to clarity and capital efficiency. Traditional asset management often obscures how money is deployed, rebalanced, or hedged. In contrast, Lorenzo’s vaults expose strategy logic, performance history, and allocation rules on-chain. Users can verify where funds are deployed, how returns are generated, and what risks are being taken in real time. This level of transparency fundamentally alters the trust relationship between asset managers and investors.
Tokenization is not just a wrapper in Lorenzo — it is the engine of composability. OTF tokens can be traded, used as collateral, integrated into DeFi protocols, or combined with other structured products. This creates a financial Lego set where strategies become building blocks. Instead of choosing between yield farming, speculation, or hedging, users can assemble portfolios that combine all three, with automated management handling execution complexity.
Governance within Lorenzo is driven by BANK, the protocol’s native token. BANK is not a passive governance asset; it is the coordination layer
