Blockchain networks rely on gas fees to compensate validators and maintain network integrity. Typically, these fees are paid in the chain’s native token. Lorenzo Protocol, with its Bitcoin-focused Cosmos-based appchain, approaches this model with a unique twist. A key question arises for users: Can transactions on the Lorenzo appchain—or related operations—be paid using tokens like stBTC or BANK, or is a separate native token required?
Lorenzo Protocol operates as an on-chain asset management platform, bridging Bitcoin liquidity into DeFi ecosystems. Its core infrastructure is a sovereign appchain built on Cosmos SDK with Ethermint for EVM compatibility. This chain supports crucial operations such as the minting and management of liquid staking tokens like stBTC, which represent staked Bitcoin via integrations with Babylon. Beyond the appchain, Lorenzo’s ecosystem spans multiple networks—including BNB Chain, Ethereum, Sui, and others—with total value locked exceeding $600 million by late 2025. The platform’s offerings include OTFs, liquid staking tokens, and wrapped BTC standards like enzoBTC.
A distinguishing feature of the appchain is its Bitcoin-centric design. When users stake BTC, relayers verify deposits on the Bitcoin network and mint stBTC directly on the Lorenzo appchain. stBTC serves multiple purposes: it is a liquid representation of staked BTC, a medium to participate in DeFi strategies, and, importantly, the currency used to pay gas fees for transactions on the appchain itself. This integration simplifies user interactions, allowing Bitcoin holders to operate within the ecosystem without acquiring unrelated gas tokens.
In contrast, the governance token BANK, issued on BNB Chain with a total supply of 2.1 billion, is reserved for protocol governance and incentives. Users employ BANK to vote on protocol changes, propose new products, or earn multipliers and rewards. While central to community governance, BANK is not accepted for covering base-layer transaction fees on the appchain. Its utility remains distinct from the operational function of stBTC.
For transactions on external networks, fee rules follow the host chain. Subscribing to OTFs on BNB Chain requires BNB, while Ethereum operations demand ETH. Similarly, bridging assets across chains—via LayerZero, Chainlink CCIP, or other mechanisms—incurs fees in the source or destination chain’s native token. Lorenzo’s multi-chain strategy requires users to navigate these different fee requirements depending on where an activity occurs.
The deliberate choice to use stBTC as the primary gas token reinforces the protocol’s Bitcoin-native philosophy. It promotes cohesion within the ecosystem, reduces friction for Bitcoin stakers, and encourages circulation of stBTC. Practical workflows illustrate this clearly: minting stBTC involves an on-chain BTC deposit, paid in BTC, followed by appchain interactions funded with stBTC. Subsequent trades, staking, or other appchain operations also use stBTC for fees. Off-chain or cross-chain activities rely on the respective network’s native tokens.
Security considerations are central to this model. The appchain leverages Cosmos Interchain Security and validator sets, with stBTC directly tied to Bitcoin collateral. Using stBTC for fees incentivizes users to maintain token holdings, supporting liquidity and aligning network incentives. Challenges include initial onboarding for users unfamiliar with stBTC and volatility considerations—stBTC’s fee purchasing power fluctuates with Bitcoin’s market value, akin to ETH gas costs on Ethereum.
In summary, transactions on the Lorenzo appchain are gas-paid with stBTC, not BANK or other native tokens. This design streamlines the Bitcoin-focused workflow while preserving operational clarity across multi-chain integrations. As the protocol grows, fee mechanics may evolve, but the current approach prioritizes efficiency, usability, and alignment with the core goal of productive Bitcoin liquidity.
