BTCFi Market Trend Analysis: Latest Developments in BTC Stake and Anchored Assets

With the launch of the first phase of the Babylon mainnet, the Pendle launch of BTC LST, and the introduction of various BTC wrapped assets, the BTCFi sector has once again become the focus of market attention. This article will analyze the latest developments in BTC (re) staking and BTC pegged assets.

BTC (Re) staking market overview

The competition for BTC LST is becoming increasingly fierce, with various parties vying for the staking income entry of BTC and its wrapped assets. Over the past 30 days, Lombard Finance has achieved rapid growth, reaching the current highest TVL with a deposit amount of 5900 BTC, surpassing the long-time leader, Solv Protocol.

Lombard has gained a competitive advantage by partnering with the top re-staking protocol Symbiotic, providing participants with a richer source of re-staking yields and DeFi participation opportunities from the ETH ecosystem.

Ecological strategy becomes a key influencing factor

In the BTC LST field, ecological strategy has become a key influencing factor in the current competitive landscape. Unlike ETH LRT, which benefits from a mature DeFi ecosystem, BTC LST currently faces more complex considerations, including downstream DeFi application scenarios, BTC L2 development, the combination of BTC pegged assets across chains, and integration with re-staking platforms.

Different BTC LST providers have adopted different strategies:

• Lombard Finance focuses on the development of the ETH ecosystem, providing rich external rewards through partnerships with Symbiotic and Karak Network, while actively promoting leveraged strategies for LBTC on ETH.

• Solv Protocol and Bedrock are actively engaged in multi-chain expansion, with ecosystem development covering upstream deposit reception and downstream application construction.

• Lorenzo Protocol and pStake Finance initially focused on building the BNB chain, supporting the reception of BTCB deposits and minting LST.

These different strategies will affect the liquidity of BTC pegged assets and the adoption of DeFi in various ecosystems, potentially triggering TVL competition between chains.

Pendle Enters BTCFi

Pendle has integrated four types of BTC LSTs: LBTC, eBTC, uniBTC, and SolvBTC.BBN into its points market. Currently, the actual adoption of LBTC is higher than the surface value, as 37% of eBTC is backed by LBTC, and Pendle's integration of eBTC also benefits Lombard indirectly.

Except for eBTC, the other three LSTs have collaborated with Corn. Corn is an emerging ETH L2 with two unique designs: veTokenomics and hybrid tokenized Bitcoin. In the future, there may be an integration path of Wrap BTC → BTC LST → BTCN → DeFi, adding a new leverage layer to the BTCFi system.

SatLayer Joins BTC Re-staking Competition

SatLayer enters the BTC staking field, becoming a new competitor of Pell Network. Both accept BTC LST for restaking and use it to provide security for other protocols. Pell, as a pioneer, has accumulated $270 million in TVL, while SatLayer is also rapidly expanding after recent financing.

As more homogeneous restaking platforms emerge, the liquidity competition for BTC and its variant assets will become increasingly intense. This provides participants with additional arbitrage opportunities, but also indicates that the supply side of the restaking sector may be oversaturated.

BTC Wrapped Token Market Landscape

Since Justin Sun's involvement in WBTC custody caused a stir, the competition in the wrapped BTC market has intensified. Major competing alternative assets include Binance's BTCB, Merlin's mBTC, The T Network's tBTC, and Mantle's FBTC.

Coinbase recently launched cbBTC, supported by its custodial services, with a current supply of 2,700 coins, and has received support from multiple mainstream DeFi protocols. Despite security concerns, WBTC still holds over 60% of the wrapped BTC market share, but its adoption rate continues to decline.

FBTC is actively promoting widespread adoption in the BTCFi space through the "Sparkle Campaign" and has been adopted by several BTC (re) staking projects.

Summary

BTCFi continues to grow, BTC (re)staking and BTC pegged assets are two key sectors. In the BTC (re)staking field, there is a trend of over-construction on the supply side, and differentiated ecological strategies have become the key to competition. Regarding BTC pegged assets, various parties actively develop their own solutions to gain acceptance from mainstream DeFi protocols and users in order to capture the market share lost by WBTC.