Exploring Bitcoin Liquid Staking protocols: key players and ecosystem insights
< BlogWhat is a Bitcoin Liquid Staking Protocol?
2024 has seen the rise of Bitcoin staking protocols, leveraging the huge economic security offered by the most capitalized crypto asset. Babylon, the leading Bitcoin staking protocol, reached a $5.25B TVL with more than 56,000 BTC staked in just a few months.
Liquid Staking Tokens (LSTs), a concept pioneered by Lido, enable users to stake their assets while retaining liquidity. A receipt token is issued representing the staked assets, which enables:
- Using the staked position as collateral for trading, lending, liquidity provisioning, or restaking protocols.
- Faster exiting of a position, as the receipt token can be sold directly (instead of using the underlying staking protocol to do a ‘native’ withdrawal).
A Bitcoin Liquid Staking Protocol applies this concept to the Bitcoin staking ecosystem, enabling users to stake to Bitcoin Staking protocols such as Babylon and get a receipt token.
Bitcoin Liquid Staking Protocols
Lombard
One of the leading players in this space is Lombard. Built on Babylon’s Bitcoin Staking Protocol, Lombard prioritizes security and a trustless staking process.
Using Lombard, BTC LST users benefit from seamless integration across blockchain ecosystems such as Ethereum and Base, making LBTC, Lombard’s Bitcoin LST, versatile for DeFi participation.
Stake BTC with Lombard and Kiln and start earning BTC staking rewards as well as Lombard and Babylon points.
Solv
Another prominent protocol is Solv, which focuses on creating tokenized Bitcoin staking opportunities. Solv offers innovative Bitcoin Liquid staking solutions, enabling projects to acquire BTC liquidity while stakers earn future yields. By enabling diverse Bitcoin liquidity derivatives, Solv fosters an interconnected DeFi environment.
Stake BTC with Solv and Kiln and start earning BTC staking rewards as well as Solv and Babylon/Core points.
PumpBTC
PumpBTC is another notable protocol bringing liquid staking to the Bitcoin ecosystem. The platform integrates Bitcoin Liquid Staking Tokens into various DeFi protocols, expanding their utility and adoption. As part of the growing liquid staking ecosystem, PumpBTC seeks to establish Bitcoin as a more active participant in decentralized finance.
Etherfi
Etherfi introduces a restaking model by taking LBTC and minting eBTC, which is subsequently staked into platforms like Symbiotic or Karak to yield additional rewards. Etherfi offers two-way bridging with a 7-day delay for withdrawals. These innovations highlight a spectrum of custodial and non-custodial approaches aimed at optimizing Bitcoin liquidity and utility in decentralized ecosystems.
Lorenzo Protocol
The Lorenzo Protocol acts as a liquidity layer for Bitcoin, matching BTC stakers with projects in need of liquidity and security. It issues Liquid Principal Tokens and Yield-Accruing Tokens, enabling users to earn yields while engaging in DeFi activities.
Bedrock
Bedrock, on the other hand, takes Wrapped Bitcoin (WBTC) on Ethereum and relays messages to BitGo, the WBTC custodian, to unlock native Bitcoin for staking in Babylon. This solution offers a two-way bridge with a 30-day locking period. swBTC facilitates leveraged restaking by using WBTC as collateral, enabling deposits into various restaking solutions without tapping into Babylon. It supports two-way operations with a 3-day delay for withdrawals.
pStake
Finally, pSTAKE leverages Babylon’s infrastructure to offer a non-custodial staking solution. Users can stake BTC and mint yBTC, a yield-bearing derivative, allowing them to earn while maintaining liquidity. The protocol seeks to make Bitcoin a more productive and accessible asset for all.
| Protocol | Description | Features |
|---|---|---|
| Lombard | Built on Babylon's protocol, offering trustless BTC staking with seamless integration into Ethereum and Base ecosystems. | Issues LBTC, a versatile Bitcoin LST for DeFi use. |
| Solv | Tokenizes Bitcoin staking opportunities, enabling liquidity and yield generation for projects and stakers. | Focuses on Bitcoin liquidity derivatives and interconnected DeFi environments. |
| Pump BTC | Integrates BTC LSTs into various DeFi protocols, aiming to make Bitcoin an active DeFi participant. | Promotes BTC adoption in DeFi via integration and utility expansion. |
| Lorenzo | Matches BTC stakers with liquidity-needing projects, issuing Liquid Principal Tokens and Yield-Accruing Tokens. | Supports dual-token system for liquidity and yield accrual. |
| Bedrock | Utilizes WBTC on Ethereum to relay messages to BitGo for unlocking Bitcoin to stake in Babylon. | Features a two-way bridge with a 30-day lock period for staking operations |
| SWBTC | Mints eBTC from LBTC and stakes into platforms like Symbiotic or Karak for additional rewards. | Offers restaking model and two-way bridging with a 7-day delay for withdrawals. |
| Pstake | Leverages Babylon's infrastructure for non-custodial BTC staking and issuance of yBTC, a yield-bearing derivative. | Combines liquidity and yield opportunities to make BTC more productive. |
How are we preparing at Kiln?
Kiln has been partnering with several liquid staking projects for years, since joining Lido in 2021.
Since our mission is to democratise value creation in digital assets, we strive to bring the latest staking innovations to our customers and partners, including Bitcoin staking.
In 2024, we added support for all major Bitcoin staking protocols, including Babylon, CoreDAO, Botanix and more. In addition to offering direct and white-labelled Bitcoin staking, we’ve been partnering with Bitcoin Liquid Staking projects like Lombard and Solv.
We will announce additional partnerships with more projects working on leveraging Bitcoin's economic security throughout 2025; stay tuned.
The BTC staking TVL still reflects that these protocols are in their infancy and we're planning to see them continue on their strong growth trajectory in 2025 as more protocols launch on mainnet.
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