Lorenzo Protocol (@LorenzoProtocol) is hailed as the 'BlackRock + Goldman Sachs' of the Web3 world. Behind this grand metaphor lies its core innovation - the 'Financial Abstraction Layer' is at work. Today, we will delve into this concept to understand Lorenzo's business model and ambitions.
What is the Financial Abstraction Layer?
Simply put, it is a modular financial infrastructure platform. It standardizes and tokenizes complex yield strategies from traditional finance (such as quantitative trading, arbitrage, equity staking, RWA yields, etc.) into plug-and-play 'yield modules'. This is akin to transforming the cooking process of a high-end restaurant's kitchen into standardized pre-prepared meal combinations, allowing any front-end application to easily 'heat and serve'.
Left hand capital, right hand strategy: the dual role of on-chain investment banks
· Targeting strategy providers (the investment banking side of 'Goldman Sachs'): Hedge funds, market makers, and RWA project parties have mature profit strategies but lack channels to reach a vast number of on-chain users. Lorenzo provides them with a one-click toolbox to package their strategies into standardized vaults and assists in issuing 'on-chain trading funds', achieving rapid productization of strategies and capital raising.
· Targeting capital and platform providers (the asset management side of 'BlackRock'): Wallets, Neobanks, exchanges, and even DeFi protocols hold a large amount of idle user assets and urgently need safe and stable yield solutions. Lorenzo provides ready-to-use yield APIs, allowing these platforms to offer diversified yield products to users without building their own asset management teams, thereby enhancing user stickiness and capital efficiency.
Value Creation and Capture Flywheel
1. Strategy On-chain: More quality strategy providers settle in, bringing more competitive yield products.
2. Platform Integration: More front-end platform integration OTF brings enormous potential capital flow to products.
3. User Influx: A rich array of products and convenient entry points attract users to deposit funds, expanding the total locked value of the protocol.
4. Protocol Revenue: The protocol generates revenue from strategy aggregation, cross-chain bridge services, and ecological cooperation.
5. Value Return: A portion of the protocol's income is used to buy back and destroy $BANK from the open market, creating deflationary pressure and value support. At the same time, $BANK holders participate in governance through staking (veBANK model) and share in the ecological growth dividends.
Therefore, the essence of Lorenzo Protocol is a highly efficient financial resource matching platform. It does not directly manage assets but provides the best 'shelf' (financial abstraction layer) and 'logistics system' (settlement) to enable strategies (goods) and capital (people) to meet efficiently. The value of $BANK is deeply bound to the trading scale, income level, and ecological prosperity of this platform.
While the market is buzzing about the next killer application on-chain, Lorenzo Protocol is quietly building the infrastructure that allows all killer applications to easily 'make money'. This may be its most profound moat.
@Lorenzo Protocol #LorenzoProtocol $BANK
