LBTC FAQs
Lombard is on a mission to grow the digital economy by building the infrastructure and distribution channels that transform Bitcoin from a store of value into a productive financial tool.
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 Bitcoin derivatives can I stake into Lombard?
Only native BTC can be staked into Lombard.
Users can make use of the Lombard Swap feature to swap ERC-20 tokens (ETH, WBTC, tBTC, etc.) directly for LBTC, or for BTC which they can then stake and use to mint LBTC. Swaps are routed by 1inch. For more, see our How to Swap doc.
What network can I stake Bitcoin from and to?
BTC must be staked on the bitcoin network. LBTC is minted on the Ethereum mainnet. Lombard accepts deposits from all Bitcoin addresses.
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 stake to Lombard?
Users stake BTC into Lombard by depositing to a unique bitcoin address from any bitcoin wallet. This includes any DeFi wallet, hardware wallet, or centralized exchange which allows you to make a transfer on the bitcoin network to a SegWit bitcoin address. For convenience, we have integrated shortcuts with the following BTC wallets: OKX Wallet, Xverse, and Bitget.
To deposit into Lombard, you must first select the destination you wish to mint LBTC to. Lombard will generate a unique bitcoin deposit address based on the destination chain (initially only Ethereum mainnet) and destination address, so it’s only possible to claim on this chain and the address that was used at generation.
For more details, please see our Staking BTC doc.
What happens when I stake BTC into Lombard?
Upon staking BTC, the following processes take place:
User specifies the network they want to mint LBTC to (destination address, chain, a referrer ID) and a unique wallet address is generated. It’s deterministic and can be checked with our public key.
User deposits BTC.
Lombard Security Consortium signs after 6 confirmations. This combined signature allows the user to mint LBTC and receive an amount of LBTC equivalent to the BTC staked on your selected network. This takes around 60 minutes.
How can I verify the unique 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.
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.
What if more BTC is deposited into Lombard than can be staked into Babylon’s first cap?
Babylon's first cap is just 1,000 BTC. In the instance that more BTC is deposited into Lombard than can be staked into Babylon, deposits will be recorded and queued for the next available Babylon cap (date and time currently undisclosed).
What happens once Babylon’s first cap of 1,000 bitcoins is filled?
In the instance that Babylon’s first cap is filled, Lombard will continue accepting BTC deposits and minting LBTC. These deposits will also be queued for the next available cap (date and time currently undisclosed).
How will Lombard distribute Babylon Staking Rewards and Points?
At the end of Babylon’s Phase-1, Lombard will distribute all Babylon Points earned through staking to Lombard depositors that deposited before the end of Babylon’s Phase-1 and first cap (undisclosed).
Babylon’s Phase-1 does not provide direct staking rewards since there is no active Proof of Stake (PoS) chain yet. Instead, a point system tracks staking activity, with points assigned to each staker's public key.
In this case, Lombard acts as the staker on behalf of our depositors, earning Babylon Points proportionally to the amount staked. We will then distribute these points equally among our depositors from our mainnet launch (August 21st) until the end of Babylon’s Phase-1 and first cap (undisclosed).
Points Allocation: During the initial 1,000 BTC cap, 3,125 Babylon Points will be allocated per Bitcoin block, proportionally among all active stakes within that block. Lombard will receive these points daily and distribute them to our users at the end of Phase-1.
Dashboard Update: We’re working on integrating a Babylon Points counter into the DeFi Dashboard on the Lombard WebApp, though this feature will not be available at launch.
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 the Lombard 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.
What wallets can I use to mint LBTC?
You can mint LBTC to a variety of popular wallets on Ethereum mainnet, including MetaMask, Bitget, XVerse, OKX Wallet, and Tomo Wallet, and all wallets via Wallet Connect including Binance Wallet.
Where can I use LBTC?
Lombard is proud to launch LBTC with leading DeFi platforms Pendle, Morpho, Symbiotic, Gearbox, Gauntlet, Derive (formerly Lyra), Ether.fi, and Corn. These protocols currently manage $12 billion worth of assets and will incorporate LBTC for a wide range of use cases, including re-staking, lending and borrowing, options trading, and yield-farming.
At launch, LBTC can be deposited into the Lombard DeFi Vault on the Lombard WebApp.
Lombard’s DeFi Vault is designed to bridge the gap between bitcoin and DeFi, by offering LBTC holders one-click access to DeFi yields without any of the complexities. It accepts LBTC, a liquid staked token representation of Bitcoin, as well as WBTC or cbBTC, and seeks to capture the highest risk-adjusted yields derived from multiple DeFi strategies.
Is Lombard running a points campaign?
We will be providing information on this shortly. Stay tuned for updates!
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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