BTC(re) staking and BTC pegged asset market dynamics

Recently, with the launch of the first phase of the Babylon mainnet, the introduction of Pendle's BTC LST, and the release of multiple wrapped BTCs, BTCFi has once again become the market focus. This article will focus on the latest developments in BTC (re) staking and BTC collateralized assets.

BTC (Re) Staking Market Overview

Currently, the competition among BTC LSTs is becoming increasingly fierce, with all parties vying for the staking yield entry of BTC and its derivative assets. In the past 30 days, Lombard Finance has experienced rapid growth, reaching a current peak TVL with approximately 5900 BTC in deposits, surpassing the long-time leader Solv Protocol.

Lombard has established strategic partnerships with top re-staking protocols to provide participants with a richer source of re-staking returns 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, BTC LST faces more complex considerations, including downstream DeFi application scenarios, the development stage of BTC L2, the combination with various chain BTC pegged assets, and integration with re-staking platforms.

Currently, various BTC LST providers are taking different strategic directions:

1. Lombard Finance focuses on the development of the ETH ecosystem, providing rich external rewards and re-staking support on ETH for stakers through partnerships with multiple collaborators.

2. Solv Protocol and Bedrock are actively expanding across multiple chains, covering upstream deposit reception and downstream application development.

3. Lorenzo Protocol and pStake Finance initially focused on building on the BNB chain, supporting the reception of BTCB deposits and minting the corresponding LST.

Pendle Enters BTCFi

Pendle has recently integrated multiple BTC LSTs into its points market, including LBTC, eBTC, uniBTC, and SolvBTC.BBN. This move adds new nested leverage opportunities to the BTCFi system while also introducing new systemic risks.

SatLayer Joins BTC Re-Staking Competition

SatLayer, as a new entrant, competes with Pell Network. Both accept re-staking of BTC LST and use it to provide security for other protocols. As more homogeneous re-staking platforms emerge, the competition for liquidity of BTC and its derivative assets will become increasingly fierce.

BTC Pegged Asset Market Dynamics

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

2. WBTC Multi-Chain Expansion: Despite security concerns, WBTC still holds over 60% of the wrapped BTC market share. It was recently announced to be deployed on Avalanche and BNB Chain, and is expanding across multiple chains through LayerZero's full-chain interchangeable token standard.

3. FBTC is actively expanding: it has been deployed on Ethereum, Mantle, and BNB chains, promoting widespread adoption in the BTCFi space through the "Sparkle Campaign."

Currently, various wrapped BTC assets are actively seeking integration into major DeFi protocols and widespread user acceptance to compete for market position. New entrants like tgBTC from the TON blockchain and sBTC from Stacks will soon join the competition.

Summary

In the continuous growth trend of BTCFi, BTC (re) staking and BTC pegged assets are two key sectors worth paying attention to. The BTC (re) staking field is experiencing an excessive construction trend on the supply side, while the market size on the demand side remains unknown. For BTC pegged assets, trust remains a key issue, and all parties are actively developing different solutions to compete for market share.