For most of its history, Bitcoin is appreciated as digital gold: an active one to hold instead of using. Trillions of dollars have left that passivity to BTC from inactive in portfolios, disconnected from the yield strategies and composability that decentralized finances (Defi) define.
The rise of liquid deployment tokens promises to change that, so that Bitcoin is not only integrated into onchain capital markets as a store of value but also if a productive assets.
Liquid expansion refers to the process of use that their crypto offers to help secure a network, and to receive a liquid, tradable token that represents their set assets and can be used about Defi, while the original tokens earn permanent rewards.
Lombard Finance has emerged as one of the prominent projects in Bitcoin liquid. The flagship product, LBTC, is a yielding token with 1: 1 by BTC.
When BTC is deposited in the Lombard protocol, the underlying coins are used, mainly via Babylon, a protocol that makes confidentless, self-wide bitcoin deployment possible. Users receive LBTC in exchange for this, which can be implemented in defi -ecosystems, while the original Bitcoin yields rewards.
This double functionality is the key. Holders can retain exposure to Bitcoin while using LBTC when lending, borrowing and liquidity determination on protocols such as Aave, Morpho, Pendle and Ether.fi. Designed for interoperability, LBTC moves over Ethereum, Base, BNB chain and other networks, preventing liquidity fragmentation and ensures that Bitcoin can participate in a multi-chain defi environment.
A market that may be worth billions
By mobilizing the slumbering liquidity of BTC, Lombard and other projects for the use of liquids are intended to offer Bitcoin Defi infrastructure, so that the enormous market capitalization of the Activum can be channeled to the capital markets of Onchain.
This effort reflects the own transformation of Ethereum by derivatives for the use of liquids, but with the potential to unlock a deeper pool of value, given the Bitcoin scale.
To contextualize the scale, the liquid market of Ethereum, led by Lido’s Steth, has a market capitalization of around $ 38 billion. The entire Bitcoin LST sector, on the other hand, is still on the rise, with a total market capitalization of around $ 2.5 billion. Lombard’s LBTC alone is good for around $ 1.4 billion of it, or about 40% of the Bitcoin LST market.
Lombard’s Bard
Building on that foundation, Lombard announced this week the establishment of the Liquid Bitcoin Foundation and his native $ Bard -Token, in addition to a community of $ 6.75 million.
The foundation will act as an independent steward of the protocol, financing research, subsidies and education, while the board sets up frameworks to maintain neutrality. $ Bard will serve as the usefulness and board of the ecosystem, which gives holders the opportunity to use the core infrastructure of Lombard, to vote on proposals and gaining access to new products.
Jacob Phillips, co-founder of Lombard, described the community sale as “an invitation for more than 260,000 LBTC holders and others in the Bitcoin ecosystem to help shape the future of Bitcoin Onchain.” Erick Zhang, founder of Buidlpad who will organize the sale, added that Lombard is “a pioneer who unlocks the full potential of Bitcoin as digital gold and a basis for the next generation of capital markets.”
