@Lorenzo Protocol #lorenzoprotocol #Bank
Lorenzo Protocol's architecture is built on a sophisticated technical foundation, often referred to as a Financial Abstraction Layer (FAL). This layer is responsible for translating complicated, multi-source yield strategies into the composable, tokenized products that users interact with.
Vaults: The Engine of Strategy
The core of the FAL consists of Vaults, which are specialized smart contracts.
* Deposits and Allocation: Users deposit supported assets into a Vault.
* Strategy Execution: The Vault allocates the capital according to a defined strategy (e.g., quant trading, volatility management, or structured yield). This execution may involve approved off-chain trading managers or automated systems for real-world asset exposure, but the capital control and settlement remain on-chain.
* Tokenization: The Vault issues the user an LP (Liquidity Pool) token or an OTF token (like the flagship USD1+ OTF), representing their share of the underlying strategy's Net Asset Value (NAV).
Flagship Products
The protocol's ecosystem revolves around several institutional-grade offerings:
* USD1+ OTF: A tokenized on-chain fund designed to provide stable, predictable yield, backed by diversified, low-risk strategies (RWA, Quant, DeFi) and built on scalable chains like BNB Chain.
* BTCFi Integration (stBTC, enzoBTC): Lorenzo is a key player in the Bitcoin Liquidity Finance Layer, enabling Bitcoin holders to earn yield without the typical wrapping or custodial risks, essentially turning BTC into a productive DeFi asset.
This modular, transparent structure is crucial for attracting the "serious capital" from institutions that demand structured exposure, risk management, and predictable behavior.
