Competition in the BTCFi Sector Heats Up: BTC Re-staking and Changes in the Anchor Asset Landscape

With the launch of the first phase of the Babylon mainnet, Pendle's integration of BTC LST, and the introduction of various wrapped BTC products, market attention towards BTCFi continues to rise. This article will explore the latest developments in the areas of BTC re-staking and BTC collateralized assets.

The competition in the BTC staking market intensifies

After rapidly reaching the 1000 BTC cap in Babylon Stage 1, the competition between BTC LSTs has become increasingly fierce. In the past 30 days, Lombard Finance has surpassed the long-time leader Solv Protocol with a deposit amount of 5.9k BTC, becoming the platform with the highest current TVL. Lombard has gained a competitive advantage by forming strategic partnerships with top re-staking protocols, providing users with richer ETH ecosystem re-staking yields and DeFi participation opportunities.

Ecological strategy becomes the key to BTC LST competition

Unlike ETH LRT, BTC LST faces more complex ecological considerations, including downstream DeFi applications, BTC L2 development, integration with BTC pegged assets across chains, and collaboration with re-staking platforms. At the current stage, ecological strategic choices directly affect growth speed and early market share.

Lombard Finance focuses on the development of the ETH ecosystem, providing rich external rewards for stakers through partnerships with multiple re-staking protocols. LBTC, as the first BTC LST supported by re-staking protocols on ETH, is actively promoting leveraged applications on ETH.

Solv Protocol and Bedrock adopt a multi-chain expansion strategy, developing upstream deposit reception and downstream applications. The main liquidity of SolvBTC.BBN and uniBTC is concentrated on the BNB and ETH chains, while also injecting BTC liquidity into other L2s.

Lorenzo Protocol and pStake Finance initially focused on building on the BNB chain, supporting BTCB deposits and minting their respective LSTs. Lorenzo also built an innovative yield market structure based on BTCFi.

Pendle Enters the BTCFi Space

Pendle has integrated various BTC LSTs into its points market, including LBTC, eBTC, uniBTC, and SolvBTC.BBN. The actual adoption of LBTC on Pendle exceeds surface data and benefits indirectly through eBTC. Multiple BTC LSTs are collaborating with the emerging ETH L2 Corn, laying the groundwork for the potential minting of BTCN in the future.

The integration of Pendle with BTC LST is expected to drive a broader trend in DeFi applications, as the leverage of points becomes a key scenario for income-generating asset strategies.

The competition among re-staking platforms intensifies

SatLayer has joined the BTC staking market, becoming a new competitor to Pell Network. Both accept BTC LST staking and provide security for other protocols. Pell has accumulated $270 million in TVL and integrates major BTC derivatives from multiple networks. SatLayer is deployed on Ethereum, supports various BTC LSTs, and plans further expansion.

Changes in the Market Landscape for BTC-Backed Assets

The competition in the BTC market is intensifying, with major alternative assets including BTCB, mBTC, tBTC, and FBTC. Coinbase has launched cbBTC, deployed on the Base and Ethereum networks, gaining support from multiple DeFi protocols. Although WBTC still holds a dominant position in the market, its adoption rate continues to decline, and some leading DeFi protocols have begun to remove WBTC as collateral.

FBTC is actively expanding, having been deployed across multiple networks, and is promoting widespread adoption in the BTCFi space through incentive programs. Various wrapped BTC assets are competing for integration into DeFi protocols and user acceptance in a bid for market share.

Summary

The BTCFi sector continues to grow, with BTC re-staking and pegged assets becoming key areas. The re-staking market is showing signs of excessive supply-side construction, with differentiated ecological strategies and unique downstream applications becoming competitive keys. The interweaving of BTC pegged assets introduces new systemic risks, while all parties actively develop their own solutions in a bid to become a strong alternative to WBTC. Trust remains the core issue of BTC pegged assets, and the market landscape is still rapidly evolving.