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What is Lorenzo Protocol?
Lorenzo Protocol is the first Bitcoin Liquidity Finance Layer, operating as a Layer 2 (L2) Liquid Staking-as-a-Service, secured by Babylon Chain's Bitcoin Shared Security mechanism.
The project aims to optimize idle BTC profits by providing staking and DeFi solutions, allowing users to stake BTC to receive tokenized tokens (stBTC, enzoBTC) and participate in effective investment opportunities. Key features include staking tokenization (LPT and YAT), support for restaking BTC/WBTC, and deep integration with the PoS ecosystem.
How does Lorenzo Protocol work?
Lorenzo Protocol is built on Cosmos Ethermint, using a relay system to synchronize data from Bitcoin Layer 1 (L1) and its dedicated application chain. The project connects BTC holders with projects needing liquidity through staking mechanisms on Babylon Chain, leveraging Bitcoin Shared Security to stake BTC into Proof-of-Stake (PoS) chains.
- Users stake BTC through Lorenzo dApp, receiving stBTC (Liquid Principal Token) at a 1:1 ratio.
- Staking rewards are encoded into YATs (Yield Accruing Tokens), including profits and Lorenzo Points.
- stBTC can be used in DeFi protocols to optimize profits.
- When unstaking, users return stBTC and receive BTC after 48 hours.
The system ensures transparency and security through smart contracts and block header synchronization mechanisms.
Lorenzo Protocol's Products
stBTC: Liquid Staking Token issued when staking BTC on Babylon, representing the original BTC and usable in DeFi.
stBTC enzoBTC: Wrapped BTC issued by Lorenzo, integrating Babylon staking profits and on-chain liquidity mining profits, suitable for DeFi applications.
