BTC (re) staking and the development trends of the BTC pegged asset market

Recently, with the launch of the first phase of the Babylon mainnet, the introduction of Pendle's BTC LST, and the release of various wrapped BTC products, the market's attention on BTCFi has once again increased. This article will explore the latest developments in BTC (re) staking and the BTC pegged asset space.

BTC (Re)staking Market Overview

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

Lombard has formed a strategic partnership with top re-staking protocols to provide participants with a richer source of re-staking yield from the ETH ecosystem and DeFi participation opportunities, thereby gaining a competitive advantage in the current phase.

The Importance of Ecological Strategy for BTC LST

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 ecology of ETH and ETH L2, BTC LST currently faces more complex considerations, including downstream DeFi application scenarios, the development stage of BTC L2, the combination with BTC-pegged assets on various chains, and the integration with re-staking platforms.

Comparison of Strategies of Major BTC LST Providers

1. Lombard Finance: Focused on the development of the ETH ecosystem, collaborating with multiple re-staking protocols to provide rich external rewards for stakers. Actively promoting leveraged strategies for $LBTC on ETH, working with several key partners.

2. Solv Protocol and Bedrock DeFi: Actively expanding across multiple chains, with ecosystem development covering upstream deposit reception and downstream application construction. Main liquidity is concentrated on BNB and ETH chains, while injecting BTC liquidity into other L2s.

3. Lorenzo Protocol and pStake Finance: The initial focus is on building the BNB chain, supporting the reception of $BTCB deposits, and respectively minting LST - $stBTC and $yBTC on the BNB chain.

Pendle Enters BTCFi

Pendle has integrated four types of BTC LST into its rewards market, including $LBTC, $eBTC, $uniBTC, and $SolvBTC.BBN. This move provides BTC LST holders with more opportunities to optimize their yield strategies.

SatLayer Joins the BTC Re-staking Market

SatLayer, as an emerging BTC re-staking platform, competes with Pell Network. SatLayer is currently deployed on Ethereum, supporting the reception of various BTC LSTs, and plans for further integrations. As the number of re-staking platforms increases, the competition for the liquidity of BTC and its variant assets will become increasingly fierce.

Current State of the BTC Wrapped Token Market

The competition in the BTC market is further intensifying, with major competing alternative assets including $BTCB, $mBTC, $tBTC, $FBTC, and various BTC LST assets.

1. Coinbase launched cbBTC: deployed on the Base and Ethereum networks, it has received support from multiple mainstream DeFi protocols and plans to expand to more chains.

2. WBTC's multi-chain expansion: Despite security concerns, WBTC still holds over 60% of the wrapped BTC market share. BitGo is consolidating its market position through multi-chain deployment and cross-chain standards.

3. The active expansion of FBTC: deployed on Ethereum, Mantle, and BNB chains, actively promoting adoption in the BTCFi space through the "Sparkle Campaign".

Summary

In the trend of continuous growth of BTCFi, BTC (re) staking and BTC pegged assets are two key areas worth ongoing attention. The BTC (re) staking sector is experiencing a trend of excessive construction and competition on the supply side, while the market size on the demand side remains unclear. For various BTC pegged assets, trust is still a key issue, and multiple parties are actively developing their respective BTC pegged assets through different solutions to compete for market share.