Bitcoin is by far the largest asset in crypto, and the Bitcoin DeFi space is building an ecosystem of platforms and protocols to utilize BTC as a core DeFi asset. Lombard Finance is a key player, and has launched a BTC liquid staking token called LBTC. Lombard users can stake BTC through a protocol called Babylon and mint LBTC tokens in return, which can then be used on other DeFi protocols such as Pendle. This presents a range of opportunities to both earn yield and farm points from the various protocols in use.
Highly prominent in the expanding Bitcoin DeFi landscape, Lombard Finance is a BTC liquid staking protocol, allowing users to earn yield on their BTC and farm airdrop points.
While BTC has previously not had utility as a yield bearing asset, Lombard Finance is making moves to change that situation through liquid staking token LBTC.
Lombard Finance Growth
Data on Dune shows that Lombard has been expanding since launch in August, with TVL now above $400 million and an issued supply of 6,188 LBTC, while the number of unique users is approaching 9,000.
Built With Babylon
Lombard is built on a protocol called Babylon, which facilitates self-custodial bitcoin staking, or as the platform itself puts it: “the third native use case for bitcoin”, after value storage and payment.
Lombard describes Babylon as “the EigenLayer of Bitcoin”, letting PoS chains use staked BTC to secure their networks, while BTC stakers earn rewards in return, although Babylon has yet to delegate any staked BTC up to now, and so currently-locked coins are not earning yield.
But what Lombard Finance has done is allow users to receive an LST–the LBTC token–in return for BTC staked on Babylon, and that LBTC can then be put to work elsewhere.
How to Mint LBTC
The process goes like this: through Lombard you stake BTC to Babylon, and Lombard then lets you mint LBTC tokens 1:1 to your staked BTC. Then you take those LBTC tokens and use them on compatible protocols, earning yield and points. Additionally, you’ll passively earn Babylon points and Lombard Lux (the name of Lombard’s points).
Before we continue, 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.
But now to get started with Lombard, here is what you need to do:
- On the front of the Lombard app, click Stake BTC.
- Then on the staking page, connect an Ethereum wallet (LBTC is an ERC-20 token on Ethereum), make sure you’re on the Ethereum network, and confirm your wallet address–this is where the LBTC will be sent. You can then either send BTC to the BTC address provided where it says Stake directly, but the easier option is to stake from your BTC wallet, meaning you also have to click the appropriate icon to connect up that wallet from where it says Stake via wallet.
- Then you need to enter the stake amount to use and click Stake.
- After you do this you’ll get a pending message, and when the transaction is processed (and be warned this takes at least sixty minutes), you can then go to the Dashboard, scroll down to Stake in progress, and click mint LBTC.
- You’ll get a pending notice…
