Most people in crypto are still doing one of two things
Either they are holding tokens and hoping the market goes up
Or they are chasing yields by jumping from one protocol to another, trying to stitch together a strategy on their own
But traditional finance did something different a long time ago
It packaged strategies into products so you could simply buy exposure
That is the gap Lorenzo Protocol is trying to fill
Lorenzo is building an on chain asset management platform that turns real strategy exposure into tokenized products you can hold like a normal asset
Instead of asking users to be full time traders, Lorenzo wants users to choose a product and let the strategy engine do the work behind the scenes
What Lorenzo actually does
At its core, Lorenzo takes trading and yield strategies and wraps them into tokenized products
The protocol supports something called OTFs
On Chain Traded Funds
Think of them like fund style products but represented as tokens, so they can live in your wallet and potentially integrate with DeFi apps
Binance Academy describes Lorenzo as an asset management platform that brings traditional strategies on chain through tokenized products, with OTFs giving exposure to things like quant trading, managed futures style strategies, volatility strategies, and structured yield products
So instead of asking you to manually build a complex strategy, the idea is that you hold an OTF token and you get the strategy exposure inside it
The engine behind it all, FAL
Lorenzo often refers to its system as the Financial Abstraction Layer, or FAL
That sounds technical, but the meaning is simple
It is the layer that connects users depositing money on chain with strategies that might run on chain, off chain, or both
Lorenzo describes a model where capital can be raised on chain, deployed through execution, and then settled back on chain
This matters because some of the strategies people want are not fully on chain yet
Especially things involving centralized exchanges, certain quant strategies, or structured products
FAL is Lorenzo’s way of making those strategies feel like they are still accessible through a clean on chain product experience
Vaults, the way Lorenzo organizes strategy money
To make the strategy products practical, Lorenzo uses vaults
There are two main types described in Lorenzo’s system
A simple vault
This is basically one strategy in one container
A composed vault
This is like a portfolio vault that can route money into multiple simple vaults and rebalance between them
This setup is important because it makes it possible to build products that are not just single strategy plays
You can have diversified products that spread capital across multiple yield sources and risk profiles
A real example, USD1+ and sUSD1+
One of the clearest examples of how Lorenzo wants these products to work is the USD1+ OTF
Lorenzo announced USD1+ as live on BNB Chain testnet as an early product example
The idea is that USD1+ is a tokenized yield product that can blend several sources of return, including RWA yield, CeFi quant strategies like delta neutral approaches, and DeFi yields
In this system, users subscribe and receive sUSD1+ as the reward bearing token
Lorenzo describes sUSD1+ as non rebasing, meaning your token balance stays the same, but the value can increase over time as yield accumulates
Here is an important detail Lorenzo is very open about
Redemptions are not always instant
The product can have fixed cycle settlement and timing can vary
That sounds less exciting than instant liquidity, but it is actually realistic
That is how many fund style products work
Bitcoin side of the story, stBTC and trust assumptions
Lorenzo also has a strong Bitcoin yield narrative through products like stBTC
This is where you have to be honest and serious
Bitcoin staking and bridging designs almost always involve some trust assumptions today
A Zellic audit finding explains the stBTC design in a very direct way
Users stake BTC and receive stBTC minted by the protocol after verifying a BTC transaction through a light client verification process
The major risk Zellic highlights is about withdrawals
When a user burns stBTC, an off chain service is responsible for returning BTC, and that off chain component was not part of the audit scope
Zellic calls this an important centralization risk because the system relies on an operator to return BTC
Zellic also includes Lorenzo’s mitigation response, describing custody with Cobo using MPC wallets and additional withdrawal verification mechanisms, plus a long term goal of more decentralization
Another audit report by Salus for the stBTC bridge points out a critical business logic issue around burning stBTC during conversion back to BTC, and marks it as resolved
That same Salus report also flags centralization risk due to privileged owner control and recommends multisig and timelocks
So the honest conclusion is this
The Bitcoin products can be useful, but users should read the custody and operational model carefully, because the trust model matters as much as the smart contracts.
BANK and veBANK, the incentive and governance layer
Lorenzo’s native token is BANK
Binance Academy describes BANK as the protocol’s token used for governance, incentives, and participation in veBANK, the vote escrow system
An exchange help center summary lists BANK on BSC and states the total supply as 2,100,000,000 BANK
The simplest way to understand ve style systems is this
If you lock your token for time, you gain more influence and often more reward power
It encourages long term participation instead of short term dumping
So why Lorenzo matters
Lorenzo is trying to make strategy exposure feel normal in crypto
Not everyone wants to be a trader
Not everyone wants to manage five protocols, three chains, and two bridges just to earn yield
Lorenzo’s approach is to package strategy access into products, using OTFs and vaults, and then make those products integratable so other apps can offer them too
The tradeoff is that once you move into real strategies, you also move into real fund behavior
Settlement cycles
Operational controls
Custody assumptions for some products
And that is why audits and transparency matter
#LorenzoProtocol @Lorenzo Protocol
