What Are On-Chain Traded Funds (OTFs) in DeFi?
A simple breakdown of how Lorenzo Protocol brings institutional-style asset management on-chain using tokenized funds.
Lorenzo Protocol introduces On-Chain Traded Funds (OTFs) — tokenized investment products designed to mirror how traditional funds operate, but fully on-chain.
Instead of users managing multiple strategies themselves, OTFs bundle professional approaches like quantitative trading, Bitcoin liquid staking, volatility strategies, and real-world asset (RWA) exposure into a single token. These funds are powered by modular vaults that automatically allocate capital and rebalance strategies transparently.
Examples include stBTC for Bitcoin staking liquidity, USD1+ for diversified stable yield, and BNB+ for structured BNB returns. Performance and asset flows are visible on-chain, offering a level of transparency often missing in traditional finance.
Key takeaway: OTFs simplify access to complex yield strategies while keeping custody, liquidity, and visibility on-chain.
Action tip: Always review the underlying strategy and risk profile of an OTF before participating.
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Educational overview for Binance Square readers
Disclaimer: Not Financial Advice
