Major Update in the BTC Ecosystem: Increased Competition in the Staking Market, Diverse Anchor Assets

With the launch of the first phase of the Babylon mainnet and the introduction of Pendle's BTC LST, BTCFi has once again become the focus of the market. This article will explore the recent major developments in the BTCFi field from two aspects: BTC staking and BTC pegged assets.

Current Status of BTC Stake Market

The competition between current BTC LST (liquid staking tokens) is becoming increasingly fierce, with all parties vying for the staking yield entry of BTC and its derivative assets. In the past month, Lombard Finance has achieved rapid growth, reaching the highest TVL of approximately 5900 BTC in deposits, surpassing the long-time leader Solv Protocol.

Lombard has established a strategic partnership with the top re-staking protocol Symbiotic, providing participants with a richer source of re-staking yield and DeFi participation opportunities from the Ethereum ecosystem, thereby gaining a competitive advantage in the current phase.

Ecological Strategy Becomes Key

In the BTC LST field, ecological strategy has become a key influencing factor in the current competitive landscape. Unlike ETH LRT, which benefits from a mature DeFi ecosystem, 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, various BTC LST providers have adopted different strategic directions:

• Lombard Finance focuses on the development of the Ethereum ecosystem, providing rich external rewards for stakers through collaborations with Symbiotic and Karak Network. LBTC, as the first BTC LST supported by a restaking protocol on Ethereum, is actively promoting leveraged play on Ethereum.

• Solv Protocol and Bedrock are actively engaged in multi-chain expansion, with ecosystem development covering upstream deposit reception and downstream application construction. The main liquidity of SolvBTC.BBN and uniBTC is concentrated on the BNB and Ethereum chains, while also injecting BTC liquidity into other L2s.

• Lorenzo Protocol and pStake Finance will focus on building on the BNB chain in the initial stage, supporting the reception of BTCB deposits and minting corresponding LST. Lorenzo has specifically built a yield market based on BTCFi, adopting a structure that separates liquid principal tokens and yield accumulation tokens.

Pendle Enters BTCFi

Pendle has recently integrated four BTC LSTs (LBTC, eBTC, uniBTC, and SolvBTC.BBN) into its yield market. The actual adoption of LBTC is higher than the surface figures, as 37% of eBTC is backed by LBTC. Pendle's integration of BTC LSTs will significantly drive the broader application trends of the DeFi ecosystem.

Competition in the Re-staking Market Intensifies

SatLayer, as a newcomer, has entered the BTC staking market, competing with Pell Network. Both accept BTC LST staking and use it to provide security for other protocols. Pell, as a pioneer, has accumulated a TVL of $270 million, while SatLayer is also rapidly expanding after its funding.

BTC Anchored Asset Market Changes

Since Justin Sun's involvement in WBTC custody has sparked controversy, the competition in the wrapped BTC market has intensified. Major competing alternative assets include Binance's BTCB, Merlin's mBTC, Threshold Network's tBTC, and Mantle's FBTC.

Coinbase recently launched the custodially supported wrapped asset cbBTC, which has gained support from several major DeFi protocols. BitGo announced the deployment of WBTC on Avalanche and BNB chains, attempting to solidify its market position through multi-chain expansion. However, the adoption rate of WBTC continues to decline, and some leading DeFi protocols have begun to remove it from their collateral lists.

FBTC is actively promoting its wide application in the BTCFi field through the "Sparkle Campaign" and has been adopted by multiple BTC stake protocols.

Summary

In the continuous growth trend of BTCFi, BTC staking and pegged assets are two key sectors worth paying attention to. There is a trend of excessive supply-side construction in the staking field, where differentiated strategies and unique gameplay have become the key to competition. In terms of pegged assets, all parties are actively striving to be accepted by mainstream DeFi protocols and users to compete for the market share lost by WBTC. However, trust remains the core issue faced by all participants.