As the year comes to an end, I can't help but reflect on which agreements truly changed the game this year. If by 2024 we are still debating whether Bitcoin should 'go mainstream', then by 2025, the Lorenzo Protocol has already provided the answer — it's not about whether it should or shouldn't, but how to let it carry sovereignty and dignity to create value in a broader world.
I have always believed that Bitcoin holders can be divided into two categories: one that believes it will ultimately change the world, and another that only cares about its price fluctuations tomorrow. And Lorenzo seems to be quietly facilitating the emergence of a third category: letting Bitcoin work for itself, rather than just lying in cold wallets.
The logic behind this is not complicated, but it is executed extremely well. In the past, Bitcoin earning either relied on centralized custody (going against the original intention) or cross-chain to unfamiliar ecosystems (risk borne by oneself). Lorenzo, through the Bitcoin staking layer of Babylon, has done something quite 'simple': allowing Bitcoin to become the guardian of PoS chains in a native way, earning rewards for security services. In simple terms, this is not 'mining', but 'being a security guard'—the returns may not be as exorbitant, but solid and sustainable.
What surprised me even more was its 'liquidity nesting' design. stBTC is not the destination, but a pass. You can take it to Arbitrum, Optimism, or even the emerging Cosmos ecosystem, to continue participating in lending, LP, or even options strategies. This means that Bitcoin has truly realized 'layered earning' for the first time—the underlying earns consensus security rewards, while the upper layer captures DeFi strategy premiums.
Of course, such a design is not without cost. Multi-chain deployment is like a double-edged sword: on one hand, it activates cross-chain liquidity, while on the other, it also disperses systemic risk across dozens of contracts. The real test may not be in a bull market, but in extreme market conditions, whether stBTC can maintain its peg and exchange depth across all chains.
But in any case, the step taken by Lorenzo has redefined the 'productivity' of Bitcoin assets. It is no longer just digital gold, but a seed that can sprout by itself—you hold it, but it also allows itself to nourish the entire forest.
If the competition in the Bitcoin ecosystem is a marathon, then Lorenzo may not have reached the sprint stage yet, but it has undoubtedly chosen a longer and more stable track. If more protocols in the future learn to 'empower assets' rather than 'generate hype for narratives', the entire industry may have less bubble and more foundation.
What do you think, will Bitcoin as an income-generating asset ultimately head towards 'steady rental income' or 'risk and return coexist'? Let's discuss in the comments.
