A review of the eight major liquidity staking protocols in the Babylon ecosystem: Who is the leader in TVL?

Author: Golem, Odaily Planet Daily

The two hottest narrative directions in the Bitcoin ecosystem for 2024 are expanding Bitcoin's programmability and staking for yield. The scalability solutions for Bitcoin are still in a phase of diverse exploration, but the staking narrative has already differentiated into "big and small kings."

Babylon has become the mainstream in the Bitcoin staking narrative due to its features such as user asset self-custody, sharing Bitcoin security for PoS chains, and earning staking rewards. In the first phase of the mainnet staking launched by Babylon on August 22, the limit of 1000 BTC was reached in just 7 blocks, causing the network gas fees to soar to over a thousand satoshis per byte.

The popularity of the Babylon ecosystem has also spawned many liquidity staking protocols built around Babylon. Especially for retail investors, these liquidity staking protocols not only facilitate participation in Babylon staking but also further release BTC liquidity based on Babylon, providing users with more sources of income. Odaily Planet Daily will review the liquidity staking protocols in the Babylon ecosystem in this article, with summary information shown in the figure below, and detailed protocol introductions in the main text.

Lombard (LBTC)

Lombard is a liquidity staking protocol within the Babylon ecosystem, established in April 2024, and completed a $16 million seed round financing on July 2, led by Polychain, with participation from Foresight Ventures, OKX Ventures, Robot Ventures, and Babylon.

Users depositing BTC on the Lombard platform will have it staked in Babylon to earn staking rewards, while users can mint LBTC 1:1 on the Ethereum chain to participate in DeFi activities. The staking rewards from Babylon will be directly credited to the LBTC token. In the future, LBTC plans to expand its liquidity to various blockchains such as Solana and Cosmos.

Lombard employs a security alliance mechanism and the non-custodial key management platform CubeSigner to ensure the safety of users' BTC.

On August 21, the day before Babylon opened mainnet staking, Lombard launched a whitelist deposit test on the mainnet, allowing eligible users to deposit BTC into Lombard, which would then help users deposit funds into Babylon when the mainnet opened. However, due to intense competition on the day of Babylon staking, Lombard decided not to stake BTC into Babylon temporarily and will invest the saved fees into ecosystem development.

At the same time, Lombard launched a public beta version on September 3, allowing all users to deposit BTC and mint LBTC on the Lombard platform. According to Dune data, the supply of LBTC has exceeded 4400.3958, with 4443 addresses.

Bedrock (uniBTC)

Bedrock is a multi-asset liquidity staking protocol founded by PoS node service provider Rock X. On May 2, 2024, Bedrock completed financing led by OKX Ventures, LongHash Ventures, and Comma 3 Ventures, with the amount undisclosed. Currently, Bedrock supports liquidity staking services for Ethereum (uniETH), Bitcoin (uniBTC), and IOTeX (uniIOTX) chains.

Bedrock's feature is that it supports staking wBTC in Babylon, and users have two staking options: one is proxy staking, where wBTC is staked on the Ethereum network, and a third party stakes the corresponding amount of BTC in Babylon; the other is conversion staking, where wBTC is converted to BTC with one click and then directly staked in Babylon. Staking rewards are credited in uniBTC, and FBTC is also supported for staking.

Bedrock chooses to collaborate with third-party BTC custodians and external verifiers to separate staking rights from transfer rights, ensuring the safety of user funds.

Bedrock is the largest delegator in the first phase of Babylon's mainnet staking, delegating 297.8 BTC, accounting for nearly 30%. The minted amount of uniBTC has currently exceeded 501, and it is undergoing the Cap 2 phase pre-staking. If the total staking amount reaches 800 BTC, a special reward pool will be unlocked.

PumpBTC (pumpBTC)

PumpBTC is a liquidity staking protocol in the Babylon ecosystem. The project was established in 2024 and has not yet disclosed public financing information.

Users can currently stake WBTC, BTCB, and FBTC on PumpBTC and receive pumpBTC 1:1. Then, third-party custodians such as Cobo and Coincover, in collaboration with PumpBTC, will delegate an equivalent amount of BTC to Babylon to earn rewards for users, with rewards settled in pumpBTC. At the same time, PumpBTC has also launched a points incentive program and team mode, where users holding pumpBTC can earn points, and those staking 0.002 BTC or more can become team leaders and invite others to form teams. There is no minimum staking requirement for team members, and successful team formation will yield corresponding pumpBTC points bonuses.

PumpBTC successfully delegated 118.4288 BTC in the first phase of Babylon's mainnet staking, accounting for 11.8%. According to Dune data, the current total supply of PumpBTC is 349.31480504, with 2333 participating staking addresses.

Lorenzo Protocol (stBTC)

Lorenzo is a liquidity financial layer for Bitcoin based on Babylon. The project completed a round of financing on October 4, 2022, with participation from Binance Labs, and the amount undisclosed.

Lorenzo issues LSTs through a principal and interest separation method. Users staking BTC or BTCB on the Lorenzo platform will receive liquidity principal tokens (LPT) stBTC 1:1, and staking rewards will be settled in yield accumulation tokens (YAT). Users can not only receive the native rewards from Babylon staking but also earn staking points from Lorenzo.

Lorenzo employs a Staking Agents mechanism to manage the issuance and settlement of LSTs. Staking Agents are responsible for staking users' BTC in Babylon, uploading staking proofs to Lorenzo, and issuing stBTC and YAT to users. Although Staking Agents are designed to consist of a group of trusted Bitcoin institutions and traditional financial giants, Lorenzo is currently the only Staking Agent.

Lorenzo successfully delegated 129.36 BTC in the first phase of Babylon's mainnet staking, accounting for 12.9%. Lorenzo has already launched the Cap 2 pre-staking activity in Babylon, with the total staked Bitcoin in Cap 1 and Cap 2 exceeding 507 BTC.

Solv Protocol (solvBTC.BBN)

Solv is a decentralized Bitcoin reserve protocol that can convert staked assets from other chains (such as Ethereum, BSC, Arbitrum, Bitcoin, etc.) into yield-bearing assets solvBTC, aiming to integrate Bitcoin liquidity across multiple chains. Solv Protocol has raised over $11 million, with investors including IOSG Ventures, Binance Labs, and Blockchain Capital.

In July, Solv Protocol announced the launch of the liquidity staking token solvBTC.BBN in collaboration with Babylon, allowing Bitcoin asset users on networks such as Ethereum, BSC, Arbitrum, and Merlin to participate in Babylon staking by minting SolvBTC.BBN and earn points rewards.

Solv Protocol has chosen to collaborate with third-party crypto asset custodians such as Ceffu to ensure the safety of users' Bitcoin assets.

Solv Protocol successfully delegated 250 BTC in the first phase of Babylon's mainnet staking, accounting for 25%, and covered all gas fees for users. According to the official platform's TVL estimate, the total minted amount of solvBTC.BBN has exceeded 3230.

pSTAKE Finance (yBTC)

pSTAKE is a well-established liquidity staking protocol for POS tokens, with total financing exceeding $20 million, with investors including Galaxy Digital, DeFiance Capital, and Binance Labs.

On July 29, it announced the launch of a Bitcoin liquidity staking program on Babylon, providing a deposit limit of 50 BTC. Users depositing BTC to pSTAKE will not immediately receive liquidity staking tokens. According to the official description, yBTC is expected to be launched on Ethereum in September, at which time users depositing BTC into pSTAKE Finance will receive an equivalent amount of yBTC. However, deposits can also earn points rewards.

On August 27, pSTAKE also launched the Cap 2 pre-staking activity in Babylon, raising the deposit limit to 150 BTC, with a minimum deposit amount of 0.005 BTC. At the same time, pSTAKE ensures the safety of user funds through third-party custodians such as Cobo.

pSTAKE successfully delegated 10 BTC in the first phase of Babylon's mainnet staking, accounting for 1%. Currently, the total Bitcoin staking amount for pSTAKE is approximately 101 BTC.

Chakra

Chakra is a Bitcoin re-staking protocol based on ZK proof and a modular BTC settlement network. The project completed a round of financing on April 26, 2024, with participation from ABCDE Capital, Bixin Ventures, StarkWare, and others, with the specific amount undisclosed.

Chakra has launched a Bitcoin staking pool for Babylon, synchronized with the Babylon mainnet. This mining pool allows users to stake BTC in Chakra and seamlessly transition to Babylon, enabling users to earn both Babylon staking rewards and Chakra Prana, with various rewards to be unlocked in the near future.

The BTC staked by users is held in a multi-signature vault, jointly managed by Chakra and other entities such as Cobo, ensuring the safety of user funds.

Chakra did not delegate users' BTC into Babylon during the first phase of Babylon's mainnet staking. According to official data, the total amount of Bitcoin staked in Chakra is currently 25.75984 BTC.

SatLayer

SatLayer is a liquidity re-staking platform built on Babylon, aiming to use Bitcoin as a universal security layer to protect any type of dApp or protocol in the form of Bitcoin Verification Service (BVS). On August 22, SatLayer completed an $8 million pre-seed round financing, led by Hack VC and Castle Island Ventures, with participation from OKX Ventures, Mirana Ventures, Amber Group, and others.

SatLayer does not deposit BTC into Babylon but provides additional yield opportunities for LSD platforms on Babylon. Users can deposit wBTC and liquidity staking BTC (LBTC, pumpBTC, SolvBTC) from the Babylon ecosystem into the SatLayer platform to enjoy rewards, which are currently distributed in the form of Satlayer points.

SatLayer launched its first deposit activity on August 23, with a limit of 100 BTC, and the activity will last for 2 weeks. The current staking amount has exceeded the limit, reaching 132.54 BTC, with over 75% being uniBTC.