Last year, during the deepest part of the bear market, I spent a week reviewing all my DeFi operations and discovered an unconventional piece of data: in all the high APY pools I chased, the final yield almost completely collapsed, while a liquidity position I casually set up for testing, stBTC-WBTC, was hardly affected by the market's violent fluctuations over three months, steadily contributing a small but uninterrupted cash flow. At that moment, I realized that the 'sleeping income' we pursue is not about how high the 'income' is, but rather how stable the 'sleeping' is.
Understanding this point, we can clearly plan a construction path. Today, I won't talk about those ethereal hundred-fold theories, but instead share a set of strategies I'm currently practicing, centered around the Lorenzo Protocol, pursuing a 'three-layer combination' scheme for long-term stable cash flow. We will first lay a solid foundation, then build the income entity, and finally consider adding a bit of risk leverage.
The core of this combination is to turn your BTC assets into a 'productivity tool'—stBTC—that can generate continuous income and has a high degree of flexibility through Lorenzo's liquidity re-staking protocol. Think of it as finding a 'security job' for your idle Bitcoin; it stands guard for other new projects that require security (the so-called AVSs), thereby earning rewards. This is the cornerstone of our entire combination because it earns the most hardcore BTC-denominated returns.
My specific three-layer configuration is as follows; you can adjust the proportions according to your own risk preferences.
The first layer, also the most solid foundation: with 50% of the funds, participate directly in Lorenzo's official BTC liquidity re-staking. This step has no fancy operations; it simply involves exchanging BTC for stBTC and then staking to obtain the most basic re-staking returns. This is the ballast of the entire combination; the goal is not high returns, but extreme stability and safety. Its risk mainly lies in the security of the smart contracts of the protocol itself, which is also something we must continuously monitor.
The second layer, liquidity engine: with 30% of the funds, I will pair stBTC with WBTC or other mainstream BTC-pegged assets to form an LP, providing liquidity on mainstream DEXs. Just like I mentioned at the beginning, this kind of 'like-asset' pairing LP can minimize impermanent loss. You can earn trading fees, and to incentivize the liquidity of stBTC, the Lorenzo ecosystem usually offers additional token rewards. The returns on this layer will be higher than the first layer, with slightly increased risk, mainly depending on the safety of the DEX protocol where the LP exists.
The third layer, risk-return amplifier: with the remaining 20% of the funds, I will use it for some moderate risk operations. For example, using stBTC as collateral to borrow stablecoins from reliable lending protocols, then using this stablecoin to participate in some rigorously selected early projects in partnership with the Lorenzo ecosystem for mining. This layer has the highest potential returns but also carries the greatest risk; you must constantly monitor the health of the collateral to prevent liquidation during extreme market fluctuations. I have seen too many novices place all their hopes on this layer, ultimately losing everything due to a single spike; this is typical gambler behavior, not the mindset of our 'builders.'
Building a revenue combination that allows you to sleep peacefully is essentially a project, not a speculation. It requires you to plan the foundation, load-bearing walls, and roof like an architect, rather than getting entangled in what style to use for the chandelier from the very beginning. This three-layer combination based on Lorenzo aims to construct a relatively reliable income machine starting from Bitcoin, the most solid asset.
My scheme is also continuously iterating and optimizing. What does your current Lorenzo combination look like? Or have you discovered any components that can optimize my scheme? Feel free to share your practical experience in the comments.
Disclaimer: This article is solely a sharing of personal investment experience and does not constitute any investment advice. The cryptocurrency market is highly risky; please conduct independent research and consult professionals before making any decisions. DYOR.
