BTC (Re) staking and anchored asset market competition heats up

Recently, with the launch of the first phase of the Babylon mainnet, Pendle supporting BTC LST, and the introduction of various BTC wrapped assets, the BTCFi sector has once again become the market focus. This article will explore the latest developments in BTC (re) staking and BTC pegged assets.

BTC (Re) Staking Market Overview

The competition between BTC and LST is becoming increasingly fierce, with various parties vying for the staking and earning entry of BTC and its wrapped assets. In the past 30 days, Lombard Finance has achieved rapid growth, reaching the current highest TVL with a deposit amount of 5.9k BTC, surpassing the Solv Protocol, which had long been in a leading position.

Lombard, in collaboration with the top re-staking protocol Symbiotic, provides participants with a richer source of re-staking yield and DeFi participation opportunities from the ETH ecosystem, thereby gaining a competitive advantage at this stage.

The Importance of Ecological Strategy

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

Currently, Lombard Finance is focused on the development of the ETH ecosystem. By collaborating with Symbiotic and Karak Network, Lombard provides rich external rewards for stakers beyond Babylon. In terms of LST utility, Lombard is actively promoting leveraged play of $LBTC on ETH.

In contrast, Solv Protocol and Bedrock DeFi are actively pursuing multi-chain expansion, with ecosystem development covering upstream deposit reception and downstream application construction. Lorenzo Protocol and pStake Finance, on the other hand, will focus on the construction of the BNB chain during the initial launch phase.

Pendle Enters BTCFi

Pendle has integrated four types of BTC LST into its points market, including $LBTC, $eBTC, $uniBTC, and $SolvBTC.BBN. Among them, the actual adoption of $LBTC is higher than the surface value. Since 37% of $eBTC is backed by $LBTC, Pendle's integration of $eBTC also benefits Lombard indirectly.

Apart from $eBTC, the other three types of LST have collaborated with the emerging ETH L2 Corn. Corn features two unique designs: veTokenomics and Hybrid Tokenized Bitcoin, which may form an integrated path in the future: Wrap BTC → BTC LST → BTCN → DeFi.

SatLayer Joins the BTC Re-staking Market

SatLayer has emerged as a new competitor to Pell Network in the BTC re-staking space. Both accept BTC LST for re-staking and use it to provide security for other protocols. Pell has accumulated a TVL of $270 million, while SatLayer is also rapidly expanding after recently securing financing.

BTC Wrapped Token Market Competition

The competition in the BTC market is further intensifying. The main competing alternative assets include Binance's $BTCB, Merlin's $mBTC, TN Network's $tBTC, Mantle's $FBTC, and various BTC LST assets.

Coinbase recently launched the wrapped asset $cbBTC, supported by its custody, with a supply of 2.7k. $cbBTC is deployed on the Base and Ethereum networks and has received support from multiple mainstream DeFi protocols.

Despite security concerns, $WBTC still holds over 60% of the wrapped BTC market. BitGo recently announced the deployment of $WBTC on Avalanche and BNB chains, and is expanding across multiple chains using LayerZero's omnichain fungible token standard.

$FBTC is also actively promoting broader adoption in the BTCFi space and has been adopted by several BTC (re) staking platforms.

Summary

In the trend of continuous growth of BTCFi, BTC (re) staking and BTC pegged assets are two key sectors worth paying attention to. In the field of BTC (re) staking, there is currently a trend of excessive supply-side construction and competition. Differentiated ecological strategies and unique downstream play have become key factors in the competition among various BTC LSTs.

For BTC-pegged assets, trust remains a key issue. Exchanges, L2s, and BTC LST parties are actively developing their respective BTC-pegged assets, striving to be accepted by mainstream DeFi protocols and a wide user base in order to capture the market share lost by WBTC.