What is Lorenzo Protocol(BANK)?

At its core, Lorenzo Protocol serves as the financial layer connecting Bitcoin holders with decentralized finance opportunities. Utilizing an innovative liquid staking model, Lorenzo Protocol matches BTC holders with projects in need of Bitcoin liquidity. Through integration with Babylon’s Bitcoin staking infrastructure, Lorenzo provides Bitcoin holders a chance to participate in various staking activities while earning yields on their BTC holdings.

The primary function of the Lorenzo Protocol is to convert staked BTC into liquid staking tokens. Specifically, when users stake BTC, they receive two types of tokens:

• stBTC (Liquid Principal Tokens): representing the principal value of the staked BTC.

• YAT (Yield Accruing Tokens): representing the staking rewards and yields earned.

This dual-token mechanism enables BTC holders to enjoy both the benefits of yield generation and asset liquidity, thus significantly expanding Bitcoin’s utility in the DeFi ecosystem.

Architecture of Lorenzo Protocol

Lorenzo Protocol employs a sophisticated architecture to facilitate Bitcoin liquidity in DeFi. The system comprises:

Cosmos-based Appchain

Built using Cosmos Ethermint, the Lorenzo appchain facilitates interoperability, enabling seamless integration with multiple blockchain networks. This ensures fast, secure, and scalable transaction processing within the protocol.

Relayer System

A dedicated relayer system synchronizes the Bitcoin Layer 1 network with the Lorenzo appchain, ensuring consistent updates and reliable operations for tokenization and settlement processes.

Settlement and Token Issuance System

Issuing and settling BTC liquid staking tokens involves complex interactions. Recognizing the limited programmability of Bitcoin’s base layer, Lorenzo adopts a CeDeFi (Centralized-Decentralized Finance) approach. This model involves a trusted group of Bitcoin institutions, known as Staking Agents, responsible for secure custody, timely staking, issuance of liquid staking tokens, and settlement.

Currently, Lorenzo itself acts as the primary staking agent, with plans to onboard other trusted institutions in the future. These Staking Agents play a critical role by ensuring transparency and security throughout the staking process.

Key Features of Lorenzo Protocol(BANK)

Bitcoin Liquid Staking Plans (BLSP)

Projects on Lorenzo can create customized BLSPs clearly outlining how the BTC liquidity will be used, token issuance rules, and reward structures. Stakers participating in these BLSPs receive yield in addition to liquidity provided via stBTC tokens.

Robust DeFi Ecosystem Integration

Lorenzo is highly integrated with over 20 blockchain networks and more than 30 DeFi protocols. It currently supports $600 million in Bitcoin liquidity through its stBTC and enzoBTC offerings, positioning itself as a significant player in the Bitcoin decentralized finance ecosystem.

BANK Token Economics

The native token of Lorenzo Protocol is BANK. It plays a crucial role in governance, incentives, and capturing the protocol’s long-term value.

• Total Supply: 2.1 billion BANK

• Initial Circulating Supply: 425.25 million BANK (20.25%)

Source: https://x.com/LorenzoProtocol/status/1913093670900817960

• Incentive Rewards: 25% for BTC staking incentives and liquidity rewards

• Investors: 25% allocated to strategic investors

• Core Team: 15% for key contributors

• Ecosystem Development: 13% for integrations and collaborations

• Treasury: 5% as a strategic reserve

• Advisors: 5% for technical and marketing support

• Liquidity Support: 4% for exchange listings and market making

• Marketing: 3% for promotional activities

• Exchange Circulation: 3% for user incentives during listings

• Binance Wallet IDO: 2% reserved for the IDO event​

BANK Unlock Schedule

To ensure long-term alignment, all BANK tokens will vest completely over 60 months, with no tokens unlocked for the team, investors, advisors, or treasury during the first year.

Source: https://x.com/LorenzoProtocol/status/1913093670900817960

veBANK – Vote-Escrowed BANK

veBANK is a special governance token obtained by locking BANK tokens. It grants users enhanced governance rights, enabling voting on key protocol adjustments such as fees, product enhancements, emission schedules, and the use of ecosystem funds. veBANK holders enjoy boosted rewards, protocol revenue sharing, and stronger governance influence, proportional to their lock-up duration.

Recent Developments

Lorenzo Protocol(BANK) has shown remarkable growth following its listing on major exchanges like Binance Futures, Bitget, and PancakeSwap. Its innovative staking solutions have sparked considerable market interest, with BANK token prices reflecting significant upward momentum. Additionally, Lorenzo has steadily expanded its DeFi presence, providing diverse and robust opportunities for Bitcoin holders.

Conclusion

Lorenzo Protocol(BANK) is reshaping the way Bitcoin liquidity is utilized within the DeFi landscape. Through its innovative liquid staking solutions, robust CeDeFi architecture, and strategic tokenomics, Lorenzo enables Bitcoin holders to actively participate in decentralized finance, thus unlocking the full potential of Bitcoin as a financial asset.

Risk Reminder

Cryptocurrency investments carry substantial risks due to market volatility and regulatory uncertainties. The content provided herein is solely for informational purposes and does not constitute financial or investment advice. Investors are encouraged to conduct thorough due diligence and consult professional financial advisors before engaging in cryptocurrency investments.