What is Lorenzo Protocol (BANK)?

Deep Dive

1. Purpose & Value Proposition

Lorenzo Protocol aims to unlock Bitcoin’s dormant liquidity by letting users stake BTC directly to generate yield, bypassing intermediaries. Its flagship product, USD1+ OTF (Lorenzo Protocol), combines yields from RWA (e.g., tokenized treasuries), algorithmic trading, and DeFi strategies, offering stable returns paid in USD1, a stablecoin backed by World Liberty Financial. This bridges traditional finance with decentralized markets.

2. Technology & Architecture

Built on BNB Chain for scalability and low fees, Lorenzo uses a Financial Abstraction Layer (FAL) to standardize yield strategies into tradable tokens. For Bitcoin, it employs Babylon’s staking protocol to secure Proof-of-Stake chains while keeping BTC liquid. Users receive tokenized assets (e.g., stBTC for principal, yBTC for yield) redeemable for BTC plus rewards.

3. Tokenomics & Governance

BANK’s supply is capped at ~537 million, with 8% allocated to community rewards. It powers:
- Governance: Voting on protocol upgrades and yield strategies.
- Staking: Earn fees from OTF products.
- Access: Required to use advanced BTC staking and yield services.

Conclusion

Lorenzo Protocol positions itself as a bridge between Bitcoin’s store-of-value utility and DeFi’s yield opportunities, leveraging institutional-grade infrastructure and strategic partnerships like OpenEden for RWA integration. As BTCFi gains traction, can Lorenzo’s tokenized yield model attract sustained institutional adoption while maintaining decentralized security?