The competition for BTC re-staking and anchored assets is fierce, and ecological strategy is key.

With the launch of the first phase of the Babylon mainnet, Pendle's support for BTC LST, and the introduction of various BTC-pegged assets, the BTCFi sector has once again become a market focus. This article will analyze the latest developments in BTC re-staking and BTC-pegged assets.

Competition in the BTC Re-staking Market Heats Up

After rapidly reaching the 1000 BTC limit in Babylon Stage 1, the competition between BTC LSTs has intensified. Over the past 30 days, Lombard Finance has experienced rapid growth, achieving the highest TVL with a deposit of 5.9k BTC, surpassing the previously leading Solv Protocol.

Lombard has gained a competitive advantage in the current stage by establishing a strategic partnership with the top re-staking protocol Symbiotic, providing participants with richer re-staking yields and DeFi opportunities from the ETH ecosystem.

Ecological strategy becomes the key to BTC LST competition

Unlike ETH LRT, BTC LST faces more complex considerations, including downstream DeFi applications, BTC L2 development, integration with BTC-pegged assets across different chains, and collaboration with re-staking platforms. Currently, the choice of ecological strategy will affect the growth rate and the competition for early market share.

Lombard Finance focuses on the development of the ETH ecosystem, providing rich external rewards for stakers through partnerships with Symbiotic and Karak Network. LBTC, as the first BTC LST to receive support from the ETH re-staking protocol, is actively promoting leveraged strategies on ETH.

Solv Protocol and Bedrock DeFi adopt a multi-chain expansion strategy, covering upstream deposit reception and downstream application development. SolvBTC.BBN and uniBTC mainly concentrate liquidity 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 stBTC and yBTC on the BNB chain. Lorenzo has also built a yield market based on BTCFi, using a structure that separates liquid principal tokens and yield accumulation tokens.

Pendle Ventures into the BTCFi Space

Pendle has integrated four types of BTC LSTs, including LBTC, eBTC, uniBTC, and SolvBTC.BBN, into its yield market. The actual adoption of LBTC on Pendle is higher than the surface value, as 37% of eBTC is backed by LBTC, and Pendle's integration of eBTC also indirectly benefits Lombard.

Apart from eBTC, the other three types of LST have collaborated with the emerging ETH L2 Corn. Corn features two unique designs: veTokenomics and hybrid tokenized Bitcoin, which may potentially accept trust-based BTC LST for minting BTCN in the future.

SatLayer Joins BTC Re-staking Competition

SatLayer, as a new entrant, competes with Pell Network. Both accept the heavy staking of BTC LST and provide security for other protocols. Pell has accumulated a TVL of $270 million and integrates major BTC derivatives across 13 networks. After securing funding, SatLayer is rapidly expanding and currently supports multiple BTC LSTs.

As more homogeneous re-staking platforms emerge, the liquidity competition for BTC and its variant assets will become more intense. This provides participants with additional arbitrage opportunities, but also indicates that the supply-side infrastructure of the re-staking sector may be excessive.

Competition in the BTC-anchored asset market intensifies

After the WBTC custody dispute, competition in the wrapped BTC market has intensified further. The main competing alternative assets include BTCB, mBTC, tBTC, FBTC, and others. cbBTC launched by Coinbase has gained support from multiple DeFi protocols and plans to expand to more chains.

Despite security concerns, WBTC still holds over 60% of the wrapped BTC market. BitGo recently announced the deployment of WBTC on Avalanche and BNB chains, achieving multi-chain scalability through LayerZero's cross-chain fungible token standard. However, the adoption of WBTC continues to decline, and some leading DeFi protocols have started to remove it from their collateral lists.

FBTC is actively promoting adoption in the BTCFi space through the "Sparkle Campaign" and has been supported by multiple BTC stake protocols. Currently, various wrapped BTC assets are competing for integration into mainstream DeFi protocols and user acceptance in order to vie for the market position of the next WBTC.

Summary

BTCFi is continuously growing, with BTC staking and anchored assets being two key sectors. There is a trend of excessive supply-side construction in the re-staking field, and differentiated ecological strategies have become the key to competition. Various BTC anchored assets are interwoven, introducing new systemic risks. For anchored assets, trust remains a core issue, and all parties are actively developing their own solutions to compete for market share.