BTC (Re)staking and BTC pegged assets: Market competition intensifies, ecological layout becomes key

Recently, with the launch of the first phase of the Babylon mainnet, the introduction of Pendle's BTC LST, and the release of various wrapped BTC assets, BTCFi has once again become the focus of the market. This article will explore the latest developments in BTC (re) staking and the BTC pegged asset space.

BTC (Re)staking Market Trends

Currently, the competition among BTC LST is becoming increasingly fierce, with all parties vying for the staking income entry for BTC and its wrapped assets. In the past 30 days, Lombard Finance has reached the highest TVL with 5.9k BTC in deposits, surpassing the long-time leader Solv Protocol. Lombard has gained a competitive advantage by partnering with the top re-staking protocol Symbiotic, providing participants with richer ETH ecosystem re-staking yields and DeFi participation opportunities.

In the BTC LST field, ecological strategy has become a key influencing factor in the current competitive landscape. Unlike ETH LRT, BTC LST faces more complex considerations, including downstream DeFi application scenarios, the development stage of BTC L2, the combination with various chain BTC pegged assets, and integration with re-staking platforms, among others. Different BTC LST providers have adopted various strategies:

1. Lombard Finance focuses on the development of the ETH ecosystem, providing rich external rewards for stakers through collaborations with Symbiotic and Karak Network. LBTC, as the first BTC LST, has gained support from the ETH re-staking protocol and actively promotes leveraged strategies on ETH.

2. Solv Protocol and Bedrock DeFi are actively expanding across multiple chains, covering upstream deposit reception and downstream application development. The main liquidity of SolvBTC.BBN and uniBTC is concentrated on the BNB and ETH chains, while also injecting BTC liquidity into other L2s.

3. Lorenzo Protocol and pStake Finance focus on developing BNB Chain business in the initial stage, supporting the reception of BTCB deposits and the minting of LST. Lorenzo also built a yield market based on BTCFi, adopting a structure that separates liquid principal tokens and yield accumulation tokens.

Pendle Ventures into BTCFi

Pendle has recently integrated four types of BTC LST (LBTC, eBTC, uniBTC, and SolvBTC.BBN) into its points market. The actual adoption of LBTC is higher than the surface value, as 37% of eBTC is backed by LBTC. Pendle's integration of BTC LST will drive broader application trends in the DeFi ecosystem, with other platforms like Gearbox Protocol and Pichi Finance also actively following suit.

SatLayer Joins the BTC Re-Staking Market

SatLayer enters the BTC restaking field as a new competitor, competing with Pell Network. Both accept BTC LST for restaking and use it to provide security for other protocols. SatLayer is currently deployed on Ethereum, supports multiple BTC LSTs, and plans to expand further.

BTC Wrapped Token Market Changes

The competition in the BTC market is intensifying, with major competing alternative assets including Binance's BTCB, Merlin's mBTC, The T Network's tBTC, and Mantle's FBTC. Coinbase's cbBTC has gained support from multiple mainstream DeFi protocols and plans to expand to more chains.

Despite security concerns, WBTC still holds over 60% of the wrapped BTC market share. BitGo announced the deployment of WBTC on Avalanche and BNB chains, consolidating its market position through multi-chain expansion. However, the adoption rate of WBTC continues to decline, and some leading DeFi protocols have started to remove it from their collateral lists.

FBTC is actively promoting adoption in the BTCFi space and has been accepted by several BTC (re) staking platforms. In the future, new participants such as TON's tgBTC and Stacks' sBTC will also join the competition.

Summary

In the continuous growth trend of BTCFi, BTC (re) staking and BTC pegged assets are two key sectors worth paying attention to. The BTC (re) staking field is experiencing an over-construction trend on the supply side, where differentiated ecological strategies and unique downstream gameplay have become the keys to competition. BTC pegged assets are intertwined, introducing new systemic risks, and there is also a possibility of being over-mined. For various BTC pegged assets, trust remains a core issue, and all parties are actively striving to be accepted by mainstream DeFi protocols and users to capture the market share lost by WBTC.