Lombard's strategy focuses on attracting users who are new to DeFi, emphasizing safety and the promise of attractive yields over time.

Core Contributor Zhuling Chen described brBTC as a catalyst for transformation, emphasizing its role in securing and uniting fragmented liquidity within the ecosystem.

This launch marks the beginning of BTCFi 2.0, transitioning Bitcoin from a passive asset to a dynamic financial instrument.

To create LBTC, Lombard will enable users to stake bitcoin through a protocol named Babylon, which will mint LBTC tokens for each bitcoin staked.

In a parallel development, Bedrock has introduced brBTC, a Liquid Restaking Token (LRT) designed to redefine Bitcoin's role in DeFi.

As of December 20, 2024, DeFi protocols have nearly $126 billion in locked assets, approaching the 2021 peak of $175 billion, with ether (ETH) and its derivatives currently dominating collateral usage.

While wrapped bitcoin (wBTC) is available as collateral in DeFi, it lacks yield, with a market cap of approximately $12.9 billion, highlighting the competitive landscape for bitcoin's role in this space.

Bitcoin has seen a remarkable appreciation of 124% in 2024, outpacing ether's 48% rise, indicating a growing demand for bitcoin and its potential in DeFi.

Lombard Finance is set to launch LBTC, a yield-bearing bitcoin token, aiming to position bitcoin as the primary collateral in the decentralized finance (DeFi) ecosystem.

The anticipated yield on LBTC will derive from various blockchains secured through Babylon, with nine projects already integrating with the protocol.

Despite the current lack of yield, users are motivated to lock bitcoin in Babylon due to the potential for future rewards and airdrops.

brBTC simplifies Bitcoin's use in DeFi by consolidating various derivatives like WBTC, FBTC, and BTCB into a single unified system.