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New forms of Bitcoin liquidity find their way to emerging blockchain ecosystems, with recent integrations of the LBTC of Lombard and the SBTC from Stacks expanding possibilities for BTC holders in Cross-Chain Defi.
On Starknet, a new partnership between the Starknet Foundation and Lombard Protocol LBTC introduces, a full liquidity stips from Bitcoin. LBTC maintains a 1: 1 support by Native BTC reserves, which is bridged in Starknet Defi.
Lombard, a protocol built on Babylon, receives BTC deposits, sets them up via Babylon and publishes LBTC as a liquid representation of Stusted BTC. LBTC is intended as Multichain: available on Ethereum, Arbitrum, Sui, Genesis (Babylon) and others.
Led by Starware CEO Eli Ben-Sasson, Starknet has positioned itself as a version layer for Bitcoin, next to Ethereum. “Movements such as these stimulate a whole new class of builders and users – people who want the credibility of Bitcoin and the creativity of Defi,” he said.
The phased roll -out of LBTC will initially concentrate on bridges and liquidity facilities, followed by the introduction of setting options in safes with Lombard. These safes can enable LBTC holders to generate proceeds without surrendering custody of their underlying Bitcoin.
While BTC deployment of Babylon trust has been minimized, LBTC introduces additional trust assumptions that are linked to how Lombard Mins and Manages Tokens and Bridges, according to co-founder of Cubist Riad Wahby. Cubist offers a threshold signing tool for Lombard and other Babylon Ecosystem participants.
That said, Wahby added: “I feel more at ease at LBTC, but that’s because we know a lot about their security.”
In the meantime, Sui is preparing to integrate SBTC, the Bitcoin-supported token that is native to the Stacks ecosystem.
Token uses a threshold signature Multisig protected by a set of 15 renowned institutional signatories, with plans to gradually decentralize by directly integrating into the consensus mechanism of stacks.
The expansion will make new opportunities possible to borrow, borrow and act without jeopardizing Bitcoin, according to Stacks founder Muneeb Ali.
By bypassing centralized preservators, “SBTC will be bridged to SUI via a trust-Geminimized, non-sense process that retains the indigenous security of Bitcoin,” Ali told Blockworks.
“With this collaboration we can bring Bitcoin where people are and introduce more users to the growing Bitcoin economy,” he said. Holders of SBTC on SUI will benefit from possibilities with double yield: a basis of ~ 5% BTC remuneration only for mulping and keeping SBTC, plus extra stimuli of using the asset in SUI Defi protocols.
The decision to integrate SBTC positions as a new alternative hub for Institutional BTCFI-use-the network already establishes a significant Bitcoin-Liquidity, with more than 10% of Sui’s total TVL that now comes from Bitcoin-Dedicated Activa, according to the Sui.
Both integrations indicate a growing trend in the direction of large L1s and L2S that actively compete with BTC -Liquidity on board to enrich their soil ban. They are part of a trend that leaves Bitcoin derivatives who are dependent on centralized preservators in cross-chain implementations. This should rely on a subset of Bitcoin holders who want to retain self-dependent while they reach proceeds.
