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Babylon Chain: The New Era of Bitcoin Liquid and Restaking Solutions
Jake Kennis
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Key Takeaways
6 min read
  • The Bitcoin liquid staking and restaking sector is still in its early stages, with nearly 24,000 BTC staked through Babylon so far. Using Ethereum’s 28% ETH staked as a benchmark, there is significant potential for expansion, with over hundreds of billions worth of BTC possibly coming onchain through LSTs and LRTs, which could more than double the current total TVL found on all chains.
  • With LBTC’s $721m market cap and SolvBTC's exposure across multiple chains, now seems like an interesting time to farm these assets. Pendle’s markets, with fixed yields of 4.7%-6.98% APY and points APR potentially up to 21%, provide high-yield opportunities for early movers.

Introduction

Liquid staking and restaking have broadly been centered around ETH for most of 2024. Recently, this changed, with BTC entering the space thanks to projects such as Babylon Chain, Lombard Finance, and Solv Protocol.

With new BTC LSTs (Liquid Staking Tokens) and LRTs (Liquid Restaking Tokens), come new opportunities to earn yield on your BTC. Of course, there are many trust assumptions on who and where the BTC is sitting, along with the smart contract risk, associated with staking intermediation. However, we feel these new projects offer a strong alternative to wBTC for BTC holders to use their BTC more productively throughout DeFi without custodial risks while also earning a native yield on their holdings. With wBTC...