The Bitcoin DeFi ecosystem contains multiple layers, and SatLayer provides a protocol on which to deposit BTC liquid staking tokens, and wrapped BTC, in order to earn multiple different kinds of rewards depending on the deposited token. SatLayer has integrated tokens from Lombard Finance, Solv, Ignition, and several other protocols, all of which offer different reward stacks.
Last week we looked at Lombard Finance, which is an easy way to dive into Bitcoin DeFi and BTC liquid staking tokens, and following on from that, let’s look at how to use another Bitcoin DeFi platform called SatLayer. This can be used in conjunction with Lombard Finance and other protocols, offering further ways to participate in the expanding Bitcoin DeFi ecosystem.
What Is SatLayer?
Powered by BTC and built on Babylon, SatLayer creates a security layer that can be used to secure protocols as what are known as a BVS (Bitcoin Validated Service). For bitcoin holders, that means you can use SatLayer as a BTC restaking layer that will allow you to earn rewards from your coins, rather than just leaving them in cold storage.
In August, SatLayer raised $8 million in a pre-seed round led by Hack VC and Castle Island Ventures, and it also has backing from organizations including Franklin Templeton and OKX Ventures.
How SatLayer Works
From a user perspective, the process is relatively simple. You’ll need to stake your BTC through a protocol that offers a BTC liquid staking token compatible with SatLayer, or you can simply buy the LSTs on a DEX, or alternatively you can use some kinds of wrapped BTC.
You’ll then restake the LSTs or wrapped BTC on SatLayer in order to earn various rewards. These include SatLayer’s own points, along in some cases with rewards from Babylon, and also rewards from the protocol issuing the LST, and you’ll receive a receipt token connected to the assets you have deposited.
That all said, please note that this guide is neither an endorsement nor financial advice, and that DeFi comes with risks, including: smart contract vulnerabilities, LST depegs, frontend attacks, economic design flaws, and systemic risk across DeFi and crypto.
How to Use SatLayer With Lombard Finance
First, you’ll need to acquire the LBTC token from Lombard Finance in return for staked BTC. For a detailed walkthrough on that process, and to learn more about Lombard, please refer to this guide–Lombard Finance: How to Get Started With Bitcoin DeFi.
In short though, you need to hook up an ETH wallet in which to receive the LBTC token, and a BTC wallet from which to stake BTC on Babylon through Lombard. But having done that, rather than depositing LBTC in the Lombard Vault (as covered in the previous guide), we’ll this time use SatLayer. By the way, if you just want to get hold of LBTC without depositing BTC, you can trade it on Uniswap, keeping in mind that it’s an ERC-20 token on Ethereum.
But back to the procedure, you now need to go to the SatLayer deposits page, and hook up your wallet containing the LBTC tokens. From there, locate the LBTC row (currently the fourth one down from the top) from the list of options and then click Deposit.
Also, note here that you can look across each row and see, for each protocol, the kinds of rewards you’ll earn, the TVL of the collateral, the amounts deposited on…
