Lombard's Roadmap to Integrate LBTC Across the Ecosystem

Lombard is on a mission to expand the digital economy by transforming Bitcoin’s utility from a mere store of value into a productive financial tool. While Bitcoin remains the world’s largest crypto asset, with over $1 trillion worth of Bitcoin often sitting idle, its utility is limited compared to other digital assets. Lombard sees a significant opportunity to change this by connecting Bitcoin to decentralized finance (DeFi).

This blog provides an overview of Lombard’s roadmap, outlining the phased approach we’re taking to unlock Bitcoin's full potential within the DeFi ecosystem.

Introduction

Bitcoin’s utility in the broader crypto ecosystem has been limited, particularly in comparison to Ethereum, which has become the backbone of decentralized finance (DeFi) due to its flexible architecture. Ethereum-based assets like liquid staked Ether (popularized by platforms such as Lido and RocketPool) catalysed ecosystem growth, while innovations like EigenLayer and Symbiotic have reduced the barriers to establishing secure blockchain projects.

Until recently, the benefits of staking and DeFi were largely confined to the Ethereum ecosystem. However, Babylon's PoS innovations marks a turning point. Babylon enables Bitcoin's vast economic value to be utilized in securing Proof of Stake (PoS) networks like PoS chains, Layer 2 rollups, and Data Availability layers. Bitcoin holders can stake their BTC in a trustless, self-custodial manner, and earn staking yields providing economic security.

BTC staked into Babylon is illiquid. To enhance liquidity, Lombard introduces LBTC, a liquid form of staked Bitcoin that integrates with Babylon, allowing Bitcoin to remain active in the DeFi space. This innovation unlocks new opportunities for Bitcoin holders to earn yield and participate in the DeFi ecosystem without sacrificing asset liquidity or security.

Lombard is committed to growing and enhancing the DeFi ecosystem. Below, we outline the four key phases of our roadmap.

Phase 1: Launch Securely on Ethereum Mainnet

After four months of intensive development and collaboration with experts at Cubist, Lombard launched its flagship product: LBTC, a secure, trust-minimized, DeFi-native liquid Bitcoin. Read more about LBTC.

The phased rollout began with a Private Beta, attracting 4,143 users and minting 3930 LBTC ($230M) within 10 days. Lombard is now in its Public Beta phase, where LBTC is accessible to all.

Visit the App, and check our Dune Dashboard for real-time data.

All contracts have been thoroughly tested and audited by Veridise and Halborn, with an active Bug Bounty in place through Immunefi. Read more. Lombard’s security architecture is further reinforced through real-time security monitoring that detects threats before they materialize.

Security Consortium Expansion

Throughout Phase 1, Lombard operates with a decentralized validator network called the Security Consortium. Lombard’s unique Security Consortium validates every transaction on the protocol, ensuring LBTC’s security and decentralization is unmatched. Lombard’s Security Consortium unifies the largest ecosystem players to collective secure one BTC primitive.

During Phases 1 and 2, Lombard will continue to expand the Consortium and onboard additional parties to harden the protocol infrastructure. Consortium members will begin to include some of the largest and most trusted exchanges, mining pools, DeFi protocols, and Institutions.

Phase 2: Distribute LBTC across Ethereum DeFi

Phase 2 emphasizes expanding LBTC’s utility by integrating it with leading DeFi protocols, and making DeFi more accessible to users through simplified interfaces like the Lombard DeFi Vault.

This phase is supported by Lombard’s Luminary Programme. This programme is designed to build a robust DeFi ecosystem around LBTC by awarding community participation with Lombard Lux.

DeFi-First: Bringing Users to DeFi

With LBTC live and liquid, the focus shifts to integrating LBTC into top Ethereum DeFi protocols.

Lombard is proud to launch LBTC with leading DeFi platforms Pendle, Morpho, Symbiotic, Gearbox, Gauntlet, Derive (Lyra), and Corn. These protocols currently manage $12 billion worth of assets and incorporate LBTC for a wide range of use cases, including re-staking, lending and borrowing, options trading, and yield-farming. These integrations highlight the broad demand and utility for LBTC, enabling Bitcoin’s active participation in DeFi. Read more.

Ether.Fi and Lombard partner to bring the first Bitcoin LRT eBTC to market. The exclusive partnership means LBTC will underpin all BTC-backed liquid restaking products available on Ether.Fi, and lays the foundation for LBTC to be the Liquid Restaked Bitcoin on Ethereum. eBTC, as a Bitcoin LRT, offers holders the same advantages that ETH LRT holders currently enjoy: maintaining liquidity, earning passive yield and rewards, avoiding the need to track restaking deposit cap lifts, and leveraging liquidity across the DeFi ecosystem. Additionally, for economic security providers like Symbiotic and Eigen Layer, the increased supply bolsters their operations and furthers their missions.

You can access eBTC via Ether.Fi here, and read more about the partnership here.

Lombard’s DeFi Vault: Simplifying DeFi Participation

Additionally, Lombard introduced the DeFi Vault, operated by Veda, offering simplified, one-click access to DeFi yields with WBTC and LBTC deposits.

The DeFi Vault simplifies this process by leveraging Veda’s expertise in tokenizing DeFi yields. The vault accepts both WBTC and LBTC, offering users access to a variety of DeFi strategies, including Aave, Pendle, Uniswap, and others. The Vault grew to over $14 million in TVL during the Private Beta phase, TVL currently stands at $56M.

As deposits into the Lombard DeFi Vault continue to grow, the additional liquidity provided will enable decentralized exchange pools to facilitate optimal prices for users converting other BTC-based tokens to LBTC.

Visit the DeFi Vault, alternatively read more here.

Phase 3: Expand Across Chains & Deeper into Babylon

Phase 3 focuses on supporting the secure expansion of LBTC’s use cases in a multi-chain environment, and deepening Lombard’s integration with Babylon as its Finality Gadget is implemented and BTC staked into Babylon is utilized as economic security.

Bridging and Multi-Chain

Lombard is partnering with the industry leader (to be revealed soon) to link disjointed blockchains and data sources. This partnership allows LBTC’s potential to be maximized across many different Ethereum and Bitcoin Layer-2s, along with the DeFi protocols that are built on top of them. Connecting these ecosystems and their respective communities with the value of Liquid Bitcoin will enable new growth and initiatives to flourish. Expansion will only commence once the most secure architecture has been established and tested for robustness — built for the longevity and trusted security of every single LBTC, in perpetuity.

Babylon Staking

Lombard aims to be the supply-side of Babylon’s Bitcoin Staking Protocol. To date, Lombard has tested the process of staking via Babylon, and has begun to accumulate significant amounts of BTC to be staked as Babylon’s caps increase.

We’re also excited for Babylon to enable the Finality Gadget — which, when implemented, kick-starts BTC’s journey for providing economic security. Read more about how Babylon's Finality Gadget works here. We will then start deploying the BTC controlled by the Security Consortium with partner Finality Providers and PoS networks. We’re excited to support multiple Finality Providers to encourage ecosystem growth and risk diversification, instead of only running our own.

Phase 4: Securely Scale with the Lombard App-Chain and Institutional Product Set

Phase 4 focuses on introducing products tailored for institutional adoption, and taking the infrastructure to the next level with the ‘Lombard Ledger’.

Evolving our Infrastructure: Lombard’s Ledger

The initial consortium-based security model and social unification of the largest groups in crypto is the most robust short-term solution to enable Lombard to scale to secure $10+ billion worth of assets.

However, core to everything we do at Lombard is our belief that primitives in DeFi must be permissionless & trust-minimized. As such, we’re laying the foundation to enable community-operated consensus procedures (minting and burning LBTC, validating BTC deposits, depositing and withdrawing with Babylon, delegating stake to Babylon operators) directly on an app-chain.

We will be working on opening the Lombard Ledger as a Cosmos-SDK based app-chain, with economic security provided by Babylon. Open access to all consensus-based security procedures within the Security Consortium will then be publicly available.

Release Products for Institutions

Within Private Beta, Lombard onboarded large institutions, small retail depositors, and everything in between, providing real-world validation of LBTC with different user segments. We’re already creating the foundations, operationally and regulatory, to provide LBTC to corporate treasuries. And yes, we’re bullish, the total market cap of BTC in US-based ETFs is $75.31 Billion as of early September (source). We will build out products that will be able to serve the strictest custody and compliance requirements.

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After a successful launch that saw almost 4000 LBTC minted, there is a clear path forward for Lombard to reshape the DeFi ecosystem. Further planned expansions and DeFi integrations will fortify the Lombard ecosystem and facilitate a natural progression to larger institutional adaptation across the globe. The team at Lombard is driven to realize our vision of a homogenized Web3 ecosystem that will lay the foundation for an ever-growing shift in the financial world.