Lorenzo Protocol was created to solve a very real problem in the crypto world. Most people do not have the time or expertise to explore complicated yield strategies, dig through dozens of DeFi protocols, evaluate risks, or manage a portfolio that jumps between Bitcoin, stablecoins, RWAs, and CeFi traders. Traditional finance solved this years ago by creating managed funds, portfolios, and professional investment structures. Crypto never had anything truly comparable. Lorenzo aims to fill exactly that gap by taking sophisticated investment strategies and packaging them into simple on-chain tokens that anyone can hold.
In the Lorenzo ecosystem, these tokens are known as On-Chain Traded Funds, or OTFs. You can think of OTFs as crypto-native versions of traditional ETFs. Instead of a messy set of positions, strategies, and contracts, an OTF wraps everything into one clean token. The token tracks the value of the underlying portfolio through NAV updates, so users only need to hold one asset to gain exposure to a multi-strategy investment product. Behind the scenes, the protocol manages everything that normally requires a whole investment team.
Lorenzo is built around a layered structure. At the bottom are vaults, which are smart contracts that receive user deposits. These vaults connect to strategies like BTC staking, RWA treasury investments, stablecoin credit markets, quant trading desks, or structured yield products. A Simple Vault executes one clearly defined strategy. For example, a vault might only hold treasuries, or only allocate to a BTC staking mechanism. Composed Vaults take several of these Simple Vaults and blend them into a diversified portfolio. This is how Lorenzo recreates the structure of a multi-asset fund using automated, rule-based on-chain logic. Allocations, exposure limits, risk constraints, and portfolio rules can all be enforced programmatically.
Sitting above the vaults is something called the Financial Abstraction Layer, or FAL. This part of the system does the heavy operational work. The FAL communicates with institutional custodians, centralized trading venues, RWA issuers, and DeFi protocols. It routes deposits into the right strategies, monitors performance, handles custody workflows, reconciles asset values, and sends updated data back to the vaults. For outside users, this complexity is invisible. They simply mint a token, while the FAL ensures the capital underneath is being managed according to the fund’s rules. If a wallet or PayFi app integrates Lorenzo, the FAL allows them to provide a clean “earn yield on your balance” experience without building infrastructure from scratch.
At the top layer are the OTF tokens. These tokens represent ownership in professionally designed portfolios. They are backed by the assets in the underlying vaults, and their value moves based on the Net Asset Value of the strategies running behind them. Since OTFs behave like any other blockchain token, they can be traded, held, used as collateral, or integrated into lending markets. Unlike typical DeFi yield products that require constant repositioning, an OTF gives users exposure to an actively managed strategy through a simple, portable token.
Bitcoin has a major presence inside Lorenzo. The protocol identifies itself as a Bitcoin liquidity layer and supports two key BTC assets. The first is enzoBTC, which is a wrapped version of Bitcoin that stays strictly one to one with BTC. It does not earn yield by itself because its purpose is to act as clean collateral and a neutral liquidity asset that can flow across chains. The second is stBTC, which represents staked Bitcoin through secure, institutional-grade staking infrastructure. stBTC can generate yield while still being usable in DeFi. Together, these two tokens let platforms, DAOs, and individual users choose whether they want pure Bitcoin exposure or yield-enhanced Bitcoin exposure.
On the stablecoin side, Lorenzo integrates with USD1, a fully backed stablecoin issued by World Liberty Financial. USD1 is supported by cash and government money-market funds. Lorenzo uses USD1 as a foundation for its stablecoin yield products. USD1+ and sUSD1+ are the main options available. USD1+ operates as a rebasing token, meaning the token amount increases as yield accumulates. sUSD1+ keeps the token count fixed and increases in value instead, which is better for collateral and accounting use cases. These stablecoin products combine exposure to treasuries, RWA credit strategies, DeFi lending markets, and in some cases CeFi quant trading. Essentially they function like tokenized money-market funds but with crypto-native accessibility.
Lorenzo also supports BNB+ on BNB Chain. This is a fund-style product that wraps BNB-based yield strategies, validator rewards, or ecosystem incentives. It follows the same NAV-based structure as other OTFs and gives users a straightforward way to gain diversified yield on BNB without running complex setups.
For any deposit into Lorenzo, the user experience is consistent. A person sends BTC, stablecoins, BNB, or another supported asset into a vault or OTF. The vault mints a token that represents the user’s share. The FAL then deploys this capital into its designated strategies. Oracles and reporting mechanisms keep the NAV updated. The yield shows up either as additional tokens in the case of rebasing models or as increasing token value. When a user chooses to withdraw, their tokens are burned and they receive the underlying asset back, adjusted for gains or losses. This mirrors how traditional funds handle subscriptions and redemptions but takes advantage of blockchain transparency.
BANK is the native token that ties the ecosystem together. It lives on BNB Smart Chain with a capped supply of 2.1 billion. BANK is used for governance, staking, and participation in the vote escrow system known as veBANK. Users can lock BANK to obtain veBANK. Longer locks grant more governance weight. veBANK gives holders the ability to influence decisions such as incentive allocation, protocol upgrades, and strategic direction. Partners like World Liberty Financial have publicly purchased BANK to align themselves with the protocol, which shows the role BANK plays in the broader ecosystem.
Security and risk management are major priorities. BTC custody and staking rely on professional custodians such as Cobo, Ceffu, and ChainUp, which use MPC technology and institutional security standards. Risk controls are embedded at several layers, including strategy-level limits, vault-level exposure caps, and portfolio-level diversification rules. NAV accuracy is protected through oracles and strict valuation logic. However, the protocol still faces the natural risks associated with DeFi, such as market downturns, credit events in RWA markets, smart-contract vulnerabilities, or regulatory changes. Lorenzo tries to mitigate these but cannot eliminate them entirely.
Users interact with Lorenzo for different reasons. A Bitcoin holder may use enzoBTC or stBTC to earn yield while keeping BTC exposure. Stablecoin holders may choose sUSD1+ to earn passive income on their dollar-denominated assets. DAO treasuries often use OTFs to streamline their treasury strategies. Wallets and exchanges use the FAL to offer deposit-and-earn features without handling complexity internally.
Compared to typical DeFi protocols, Lorenzo behaves much more like an on-chain investment management platform. It does not try to be just another farm or lending pool. Instead, it focuses on offering packaged financial products that blend TradFi practices with decentralized architecture. It aims to make yield accessible to everyday users in a clean, simple form while still offering transparency, composability, and institutional-level design.
@Lorenzo Protocol #lorenzoprotocol $BANK
