FAQs
What is Lombard?
Lombard, founded in April 2024, is on a mission to grow the digital economy by building the infrastructure and distribution channels that unlocks Bitcoin’s utility, and transforms the largest decentralized asset from a store of value into a productive financial tool.
This is achievable with a security-first liquid bitcoin primitive, LBTC. LBTC is a liquid and yield-bearing representation of BTC, which can move seamlessly across chains and decentralized finance as collateral without compromising security.
LBTC, enables bitcoin holders of all sizes to fully participate in DeFi, offering unprecedented access to staking, yield generation, lending, borrowing, and trading. With LBTC, holders earn Babylon's native staking yield while still maintaining token liquidity, which can further operate in DeFi.
Who is the team behind Lombard?
Lombard’s founding team is composed of DeFi experts from Polychain, Babylon, Argent, Coinbase, and Maple. All of whom bring extensive experience in starting, scaling, and operating companies in the DeFi space.
Lombard is incubated by Polychain Capital. Polychain Capital’s incubation of Lombard provides financial backing and access to its expert teams and resources.
Who backs Lombard?
In July 2024, Lombard closed a $16 million seed funding round led by Polychain Capital, with participation from BabylonChain, Inc., dao5, Franklin Templeton, Foresight Ventures, HTX Ventures, Mirana Ventures, Mantle EcoFund, Nomad Capital, OKX Ventures, and Robot Ventures.
Strategic partnerships and contributions from major exchanges - Bitget, Bybit, OKX, HTX, and more - were established to aggregate net-new liquidity to their businesses.
The round welcomed additional commitments from prominent founders and executives at Allora, Altlayer, Babylon, BeraChain, Euler, Gearbox, Manta, Megaeth, Pendle, Ritual, Scroll, StakeStone, Seven Seas, and Zircuit. For more, read our blog on our seed round.
Why is my BTC safe with Lombard?
Lombard ensures that LBTC is protected through a multi-layered security approach. Built with security by design and hardened through rigorous code audits, proactive bug bounty programs, sanctions screening, and proactive, real-time, 24/7 security monitoring, contributing to the robust security framework essential for LBTC’s success.
Audits & Bug Bounties:
Together with leading auditors we have implemented a long-term auditing program to cover all current and future code releases. Once the reports are in, they will be shared in full on our Gitbook.
Together with Immunefi, we will launch a bug bounty program as an additional security layer on top of security by design and audits. The program offers rewards to white hats for finding and reporting any vulnerabilities in the codebase, which Lombard can then securely fix. Immunefi is the leading bug bounty and security services platform for Web3 and brings projects and hackers together to make Web3 more secure.
Lombard prioritizes security through several layers of protection:
Cubist Hardware-backed MPA Wallets: Our wallets never leave secure hardware (even during signing) and are governed by multiple security policies, including timelocks and multi-party approvals (MPA) which requires multiple parties to sign-off on every transaction, preventing unauthorized and unilateral access.
Decentralized Validation: The Security Consortium used by Lombard—comprised of industry leaders—validates and notarizes all transactions, ensuring decentralized security.
Secure Key Management: Keys are managed and stored—even during signing—by CubeSigner, a hardware-backed key management system designed and built by the Cubist team.
What risks are associated with using Lombard?
Slashing Risk: There is a risk of slashing if the validators misbehave or fail to perform their duties, which can lead to a loss of staked assets (not yet live on Babylon).
Depeg Risk: The exchange rate between LBTC and correlated BTC assets (i.e. WBTC) is set by the open market. Due to the 9 day unstaking period on Babylon and Lombard, in times of extreme market volatility, LBTC may trade at a premium or discount. However, users can always unstake via the Lombard WebApp at the full redemption rate.
Technical Risk: As with any blockchain protocol, there are inherent technical risks, including potential smart contract vulnerabilities, network attacks, and unforeseen bugs. We continuously audit our smart contracts and infrastructure, and have real-time threat monitoring and mitigation in place to mitigate these risks and take action before a threat materializes
What is the role of the Security Consortium?
Unique to Lombard is its Security Consortium, composed of independent organizations which validate and sign critical operations. These operations include the staking and unstaking of BTC into Babylon, and the minting, burning, and bridging of LBTC across supported blockchains. For more information, please check the Security Consortium page.
What is LBTC?
LBTC is a liquid staking token representing BTC staked on Babylon through Lombard. It allows users to retain liquidity while earning yields on their BTC holdings. LBTC is natively minted across major blockchain ecosystems. LBTC is backed 1:1 to BTC and users can deposit LBTC into lending pools for passive yield, use it as collateral on leveraged trading platforms, or provide LBTC liquidity on decentralized exchanges.
What addresses are supported for unstaking?
Lombard supports unstaking to any Bitcoin address starting with bc1q or bc1p. These correspond to the following address types:
P2WPKH (Pay To Witness Public Key Hash) Native SegWit variant of P2PKH.
P2WSH (Pay To Witness Script Hash) Native SegWit variant of P2SH.
P2TR (Pay To Taproot) Taproot.
Lombard does not support legacy standard scripts before the Segwit upgrade (P2PK, P2PKH, P2MS, & P2SH are all unsupported).
How can I verify the unique deposit address generated belongs to Lombard?
The address generated for the user is derived from a master seed. Currently, this is done via our API. However, we plan to open source the public key and derivation path soon, incorporating this check into our frontend and allowing anyone to verify. You can find information on how to trace transactions in the Lombard Protocol in this doc.
What are the differences between LBTC acquired through swapping versus LBTC acquired through the staking and minting?
There is no difference, LBTC is always perfectly fungible and provides identical functionality. Yield and rewards are identical for users who buy, swap, or receive LBTC, and for users who minted LBTC by depositing BTC to Lombard.
What is Babylon?
Babylon is a Shared Security Protocol that uses Bitcoin to secure the Proof-of-Stake economy. This innovation enables new low-risk, yield-bearing liquid primitives like LBTC to be built on top.
Babylon Bitcoin Staking Protocol allows systems such as PoS chains, L2s, Data Availability layers, oracles, etc. to gain staking from Bitcoin, the largest, decentralized crypto asset in the world. Read more about Babylon on their official website, or find out more about Phase-1 of Babylon’s Bitcoin Staking Mainnet Launch from this blog.
How does Lombard work with Babylon?
Lombard stakes BTC into Babylon, leveraging their secure staking infrastructure. Babylon accrues the staking rewards, while Lombard provides liquidity for the BTC amount staked on Babylon in the form of LBTC. The overall staking process entails the following:
User Staking: Users stake BTC into their unique stake address on Lombard.
Babylon Staking: Lombard stakes the BTC through Babylon, which then delegates to PoS security.
LBTC Minting: Lombard enables the users to mint LBTC tokens on selected destination chains.
Why should I stake with Lombard vs. directly with Babylon?
Babylon enables BTC staking, but leaves users' assets illiquid. LBTC—a yield-bearing Bitcoin LST—is built by Lombard on top of Babylon. LBTC allows BTC holders to earn a staking yield via Babylon while staying liquid for use across DeFi. LBTC represents BTC staked into Babylon.
Can I withdraw my BTC from Lombard?
To withdraw BTC, you must “unstake” your LBTC. Users can see the Unstaking LBTC doc to find out more.
What will be the return (yield) of my staked BTC?
The return on your staked BTC through Lombard is composed of multiple yield streams:
Babylon Staking (soon): Rewards from providing economic security to PoS networks via Babylon.
Babylon Points: Points measuring a staker’s participation.
Lombard Lux: Points accounting for a protocol participants' activity.
DeFi Yield Opportunities: By leveraging LBTC in various DeFi protocols, you can access additional yields. The exact return will depend on the market conditions and the specific DeFi protocols you engage with.
Why is it taking longer to mint my LBTC?
The process of minting LBTC involves several security checks and validations:
Bitcoin Network: The network congestion and block confirmation times on Bitcoin can take varying amounts of time, typically ranging from 10 minutes to an hour, depending on the current network load and the transaction fee.
Transaction Verification: Your staked BTC must be verified and notarized by the Lombard Security Consortium, which takes 6 block confirmations (~60 minutes).
Minting LBTC on Ethereum: After Lombard's Security Consortium provides a valid signature, the user must make a transaction on Ethereum.
Is there a minimum amount of BTC required to stake?
Yes, the minimum amount of BTC required to stake into Lombard is 0.0002 BTC (subject to change), there is no maximum deposit size. Note that the user also pays the Ethereum gas fee to mint LBTC.
What fees are associated with staking BTC into Lombard?
Lombard charges a 10% fee on Babylon staking yield accrued to the BTC staked through Lombard. Please navigate to the Protocol Fees page to learn about fees in detail. As the user, you will also pay a transaction fee to mint LBTC on the destination chain upon depositing your BTC, and an unstaking fee to withdraw your Bitcoin. Lombard manages all fees associated with staking BTC to Babylon on behalf of Lombard users.
Further Questions?
Join the Lombard Discord Server to follow the LBTC community. Here you can ask questions, read answers, share feedback with other users, and much more!
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