Recent Developments in BTC Re-staking and BTC Pegged Asset Market

Recently, with the launch of the first phase of the Babylon mainnet, Pendle's support for BTC LST, and the introduction of various BTC wrapped assets, BTCFi has once again become the focus of the market. This article will overview the latest developments in the fields of BTC re-staking and BTC anchored assets.

BTC Stake Market Competition Situation

In the past month, the competition between BTC LSTs has become increasingly fierce. Lombard Finance has rapidly grown to become the current BTC LST provider with the highest TVL, thanks to its strategic partnerships with top re-staking protocols, with a deposit amount of 5900 BTC, surpassing the original market leader, Solv Protocol.

Ecological strategy has become a key factor in the competition of BTC LST. Unlike ETH LRT, BTC LST faces more complex considerations, including downstream DeFi application scenarios, BTC L2 development, integration with BTC pegged assets across various chains, and cooperation with re-staking platforms. Currently, different BTC LST providers have adopted different strategies:

• Lombard Finance focuses on the development of the ETH ecosystem, providing rich external rewards through partnerships with multiple re-staking protocols, and actively promoting the leveraged application of $LBTC on ETH.

• Solv Protocol is expanding multi-chain with Bedrock, while developing upstream deposit reception and downstream application construction.

• Lorenzo Protocol and pStake Finance initially focus on building the BNB Chain ecosystem, supporting $BTCB deposits and minting their respective LSTs.

• Lorenzo also built a yield market based on BTCFi, adopting a structure that separates liquid principal tokens and yield accumulation tokens.

These different ecological strategies will affect the liquidity of BTC-pegged assets and the adoption of DeFi in each ecosystem, potentially triggering cross-chain TVL competition.

Pendle Enters BTCFi

Pendle recently integrated multiple BTC LSTs into its yield market, including $LBTC, $eBTC, $uniBTC, and $SolvBTC.BBN. This move provides BTC LST holders with more opportunities to optimize their yields and will also promote the broader application of BTC LSTs in the DeFi ecosystem.

It is worth noting that, apart from $eBTC, the other three LSTs are collaborating with the emerging L2 project Corn. Corn's unique veTokenomics and hybrid tokenized Bitcoin design add new possibilities to the future BTCFi system, but they also introduce new systemic risks.

SatLayer Joins BTC Staking Competition

SatLayer, as an emerging BTC re-staking platform, competes with Pell Network. SatLayer is currently deployed on Ethereum, supporting various BTC LSTs, and plans for further integrations. As the number of re-staking platforms increases, the competition for liquidity in BTC and its derivative assets will become more intense, while also indicating signs of potential oversupply in the infrastructure of the re-staking sector.

BTC Wrapped Token Market Pattern

After the WBTC custody dispute, competition in the BTC wrapping market has intensified. The main competing alternative assets include Binance's $BTCB, Merlin's $mBTC, Threshold Network's $tBTC, Mantle's $FBTC, and various BTC LST assets.

The $cbBTC launched by Coinbase has gained support from multiple DeFi protocols and plans for multi-chain expansion. Despite security concerns, WBTC still holds over 60% of the wrapped BTC market share, but its adoption rate continues to decline. FBTC is actively promoting its application in the BTCFi space through the "Sparkle Campaign."

In addition, new participants such as TON's $tgBTC and Stacks' $sBTC will also join the competition, further intensifying market competition.

Summary

BTCFi continues to grow, with BTC staking and BTC collateralized assets becoming key areas. The re-staking market is showing a trend of excessive supply-side construction, and differentiated ecological strategies along with unique downstream applications have become the competitive key. The inter-nesting of BTC collateralized assets introduces new risks, and various protocols face the risk of diminishing returns from excessive mining. For BTC collateralized assets, establishing trust remains a core issue, and all parties are actively developing solutions to gain market recognition.