BTC staking and anchored asset market competition intensifies

Recently, with the launch of the first phase of the Babylon mainnet, the Pendle launch of BTC LST, and the introduction of multiple wrapped BTC assets, BTCFi has once again become the focus of market attention. This article will analyze the latest developments in BTC re-staking and BTC pegged assets.

BTC Stake Market

Competitive Landscape

The competition between BTC and LST is becoming increasingly fierce, with all parties vying for the staking income entry of BTC and its wrapped assets. In the past 30 days, Lombard Finance has achieved rapid growth, reaching the current highest TVL with a deposit amount of 5.9k BTC, surpassing the long-time leader Solv Protocol.

Lombard has gained a competitive advantage at the current stage by collaborating with the top re-staking protocol Symbiotic, providing participants with richer re-staking yield sources and DeFi participation opportunities from the ETH ecosystem.

The Importance of Ecological Strategy

In the BTC LST field, ecological strategy has become a key influencing factor in the current competitive landscape. Unlike ETH LRT, which benefits from the mature DeFi ecosystem of ETH and its L2, BTC LST faces more complex considerations, including downstream DeFi application scenarios, the development stage of BTC L2, the combination with various chain BTC pegged assets, and integration with re-staking platforms.

Currently, Lombard Finance focuses on the development of the ETH ecosystem. Through collaborations with Symbiotic and Karak Network, Lombard provides rich external rewards for stakers beyond Babylon. LBTC, as the first BTC LST, has gained support from ETH's re-staking protocols. In terms of LST utility, Lombard is actively promoting leveraged strategies for LBTC on ETH, with important partners including Pendle, Gearbox Protocol, and Zerolend.

In contrast, Solv Protocol and Bedrock DeFi are actively expanding across multiple chains, with ecosystem development covering upstream deposit reception and downstream application construction. The main liquidity for 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 will focus on BNB Chain development during the initial launch phase. They have supported the receipt of BTCB deposits and minted LST - stBTC and yBTC on the BNB Chain. What makes Lorenzo unique is the construction of a yield market based on BTCFi, using a structure that separates liquid principal tokens (LPT) and yield accumulation tokens (YAT).

Pendle enters BTCFi

Pendle has integrated four types of BTC LST (LBTC, eBTC, uniBTC, and SolvBTC.BBN) into its points market. The actual adoption of LBTC is higher than the surface value, as 37% of eBTC is backed by LBTC.

Apart from eBTC, the other three LSTs have partnered with Corn. Corn is an emerging ETH L2 with two unique designs: veTokenomics and Hybrid Tokenized Bitcoin. The future integration path may be: Wrap BTC → BTC LST → BTCN → DeFi. This architecture adds another layer of leverage to the BTCFi system, but it also introduces new systemic risks.

SatLayer joins the competition

SatLayer enters the BTC re-staking space, becoming a new competitor to Pell Network. Both accept BTC LST re-staking and use it to provide security for other protocols. Pell has accumulated a TVL of $270 million and integrates major BTC derivatives across 13 networks. SatLayer is currently deployed on Ethereum and supports receiving multiple BTC LSTs.

BTC Anchored Asset Market

market landscape

The main competing alternative assets currently include BTCB (supply 65.3k), mBTC (supply 22.3k), tBTC (supply 3.6k), FBTC (supply 3k), and various BTC LST assets.

Coinbase launched cbBTC

Coinbase has launched the custodian-supported wrapped asset cbBTC, with a current supply of 2.7k. cbBTC is deployed on the Base and Ethereum networks, has received support from multiple mainstream DeFi protocols, and plans to expand to more chains in the future.

WBTC multi-chain expansion

Despite security concerns, WBTC still holds over 60% of the wrapped BTC market share. BitGo recently announced the deployment of WBTC on Avalanche and BNB Chain, aiming to consolidate its market position through LayerZero's Omni-Chain Fungible Token (OFT) standard for multi-chain scalability.

However, the adoption rate of WBTC continues to decline, and as leading DeFi protocols like Aave and Sky Ecosystem begin to move WBTC out as collateral, this trend will affect more DeFi protocols' attitudes towards WBTC.

FBTC actively expanding

FBTC has been deployed on Ethereum, Mantle, and BNB chains. Through the "Sparkle Campaign", FBTC is actively promoting wider adoption in the BTCFi space. In the area of BTC re-staking, FBTC has been adopted by Solv, BedRock, PumpBTC, and Pell.

Summary

In the continuous growth trend of BTCFi, BTC re-staking and BTC pegged assets are two key areas worth paying attention to. There is a trend of excessive supply-side construction in the BTC re-staking field, while the market size on the demand side is still unclear. Differentiated ecological strategies and unique downstream gameplay have become key factors in the competition among various BTC LSTs.

Trust remains a key issue for BTC pegged assets. Exchanges, L2s, and BTC LST parties are actively developing their own BTC pegged assets through various solutions, striving to be accepted by mainstream DeFi protocols and a wide range of users in order to capture the market share lost by WBTC.