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BTC Yield Strategies: Restaking and Pendle Markets
Jake Kennis
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Key Takeaways
5 min read
  • There are multiple ways to put idle BTC to use productively throughout DeFi and Pendle PT markets, providing many possibilities to earn 5-11% APY across relatively trusted protocols with varying maturity dates and high liquidity levels.
  • If you are bullish on BTC over the long term, letting it sit idle means missing out on potential yield, especially with upcoming points programs from Babylon, Berachain, Corn, and others. As with any onchain activity, consider counterparty risk, liquidity, and other relevant factors—always DYOR.

Introduction

BTC is currently trading about 10% below its all-time high, remaining within a broad range established in November 2024. While there are no immediate catalysts for BTC, ETF inflows continue to trend positively and there are very clear underlying catalysts that undermine investor behavior for the better - most notably, the President of the United States supporting crypto, clear regulatory frameworks for crypto and stablecoins in particular, Strategy (formerly Microstrategy) that keeps buying along with new institutions such as Metaplanet and the bi-weekly bid/allocation to BTC via the ETFs from retirement accounts. We have seen confirmation of these catalysts with institutions such as Fidelity recommending a 2%–5% allocation to BTC.

Farside
Source: Farside

ETF inflows continue to see positive net flows, with the trend remaining very much intact. Considering the constant flows and other factors, we haven’t historically seen BTC trade this long (multiple months), just below the highs, and it continues to go higher thereafter. Most times, we break the trend and see a lot of downsides. Right now, the BTC chart shows prolonged consolidation, having briefly tested the low part of its range and trading in the lower half of the channel, on lower volume.

While short-term speculation is not the focus, this long-term consolidation below the ATH is fundamentally a new paradigm for BTC. With the BTC-driven market and a bullish-leaning outlook for 2025, the key question shifts from “Should I allocate to BTC?” to "How can I earn additional yield while maintaining spot BTC exposure?” Enter BTC restaking yields.

ETH was historically considered the more productive asset - you could borrow against it, trade alt pairs against it on DEXs, and much more. BTC was siloed to a few centralized custodians, such as wBTC, but this has changed in recent years.

With platforms like Babylon Chain laying the foundation for “restaked BTC”, we are now seeing a surge in BTC LSTs (Liquid Staking Tokens), with highly anticipated points programs and expanding liquidity. Even Coinbase launched its own canonical version of BTC, cbBTC. The trend of BTC moving onchain is accelerating, and points programs such as Babylon and BERA are being actively farmed. Among the most notable opportunities for passive and fixed yield on BTC are the PTs (Principal Tokens) offered by Pendle.

Fixed Yield on BTC

The BTC markets on Pendle offer a range of fixed-yield opportunities. Below, we briefly break down key providers and their respective risk factors. It’s important to note that these markets vary in centralization risk, counterparty exposure, and liquidity constraints so always conduct due diligence before participating. For a deeper analysis of Babylon, the leading restaking platform, and its two largest LST issuers—Lombard and Solv Protocol, refer to our comprehensive breakdown here.

Key Risks:

Exiting the pool early can lead to losses. The best case scenario is that you either want to hold BTC beyond the maturity or, if wanting to leave prematurely, think that yields will be lower than now.

  • Rising Yields: If market conditions improve and Pendle yields increase, your PT may be worth less before maturity.
  • Urgent Exit: If you need to sell BTC at a peak or redeem due to protocol issues, you may take additional losses.

Holding until maturity ensures full redemption, but premature exits carry risk depending on yield fluctuations and protocol stability.

Below, we highlight the top BTC PT markets, focusing only on high-liquidity opportunities with at least $10M TVL and offering a minimum of 5% APY at the time of writing.

Berachain Strategies

Use LBTC and other LSTs to earn high fixed yields through Pendle PTs. These returns are driven by points farmers (YT holders) looking to maximize reward incentives from multiple sources, including Babylon, Berachain, Lombard, Concrete, Enso, Kodiak, and Dolomite. YT holders seek leveraged exposure to rewards, leaving high fixed-rate income opportunities for passive BTC holders.

  • Funds remain locked until April 14, 2025.
  • You can switch freely between Pendle PT, YT, and LP positions.
  • You can exit into ctLBTC/ctWBTC, but these tokens remain subject to the same lockup period.
  1. Lombard: 11.97% APY on LBTC (Bera Concrete), maturing in 57 days ($24M liquidity).
  2. Solv Finance: 12.05% APY on SolvBTC.BERA, maturing in 57 days ($24M liquidity).
  3. EtherFi: 11.4% APY on LiquidBeraBTC, maturing in 57 days ($28.3M liquidity).

Corn

  1. EtherFi: 10.5% APY on eBTC PT, maturing in 43 days ($25M liquidity).
  2. Lombard: 7.7% APY on LBTC PT, maturing in 15 days ($10M liquidity).
  3. Bedrock: 7.3% APY on uniBTC PT, maturing in 15 days ($53M liquidity).

Lombard

  • LBTC (Ethereum): 6.3% APY, maturing in 43 days ($37M liquidity).
  • LBTC (Base): 6.3% APY, maturing in 106 days ($19.5M liquidity).

Solv Protocol

  • SolvBTC.BBN (Ethereum): 7.2% APY, maturing in 43 days ($10M liquidity).
  • SolvBTC.BBN (BNB Chain): 5.1% APY, maturing in 43 days ($71M liquidity).

Many of the above markets take exposure to a few protocols, and you can even decide to leverage farm the PTs even further (i.e., through Morpho, Gearbox, etc.). Navigating to Pendle, users can explore the specific applications/chains that are behind a given market, so please exercise caution and do your own research for what types of counterparty exposure you're comfortable with. At present, BTC yield markets on Pendle rival, if not exceed, some of the highest APY PTs available for ETH. The divergence in these yields comprise mainly of the number of apps/chains the market is built on, which increases risk given all the strategies involved and different protocols it touches. In other words, there is increased counterparty risk and other downstream risk factors at play so DYOR.

Conclusion
Many market participants are holding spot BTC and are reluctant to diversify into altcoins during this range-bound market, where alt prices continue to decrease relative to BTC. While alts continue to underperform and trading opportunities are scarce, BTC PT markets provide a good alternative until the macro trend gets reasserted. Restaking unlocks the most liquid crypto asset in crypto to be used productively onchain whether it is used as collateral for onchain leverage or high fixed yield accounts from points/airdrop speculation. The Pendle PT markets offer short to medium-term fixed yields between 5-11%, creating an attractive place to farm. In summary, we see this as a massive, underutilized market, with BTC-backed LSTs and LRTs still in the early stages of growth. Further, I have provided additional market insights in how I am currently positioned in the markets and sectors I find interesting, you can view my market analysis and sectors I am interested in for 2025.
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Disclosure: The authors of this content and members of Nansen may be participating or invested in some of the protocols or tokens mentioned herein. The foregoing statement acts as a disclosure of potential conflicts of interest and is not a recommendation to purchase or invest in any token or participate in any protocol. Nansen does not recommend any particular course of action in relation to any token or protocol. The content herein is meant purely for educational and informational purposes only and should not be relied upon as financial, investment, legal, tax or any other professional or other advice. None of the content and information herein is presented to induce or to attempt to induce any reader or other person to buy, sell or hold any token or participate in any protocol or enter into, or offer to enter into, any agreement for or with a view to buying or selling any token or participating in any protocol. Statements made herein (including statements of opinion, if any) are wholly generic and not tailored to take into account the personal needs and unique circumstances of any reader or any other person. Readers are strongly urged to exercise caution and have regard to their own personal needs and circumstances before making any decision to buy or sell any token or participate in any protocol. Observations and views expressed herein may be changed by Nansen at any time without notice. Nansen accepts no liability whatsoever for any losses or liabilities arising from the use of or reliance on any of this content.