Assets
Lombard issues Bitcoin-backed tokens that make BTC usable across DeFi. Each asset serves a different purpose: LBTC for yield-bearing liquidity, BTC.b for simple 1:1 Bitcoin representation, and vaultsShares for automated yield strategies.
LBTC - Liquid Staked Bitcoin
LBTC is Lombard's flagship asset: a yield-bearing token backed by Bitcoin staked through the Babylon protocol.
How LBTC Works
When you deposit BTC with Lombard, your Bitcoin doesn't sit idle in a wallet. It's staked through Babylon to secure Proof-of-Stake networks called Bitcoin Secured Networks (BSNs). These networks pay for the security Bitcoin provides, and that payment flows back to LBTC holders as yield.
In return for your deposit, you receive LBTC, a liquid token representing your staked position. While your underlying BTC is working to secure networks, your LBTC is free to use however you want: trade it, lend it, provide liquidity, use it as collateral, or bridge it to other chains.
This is the core value proposition of liquid staking. Traditional staking forces you to choose between earning yield and having liquidity. LBTC gives you both.
How Staking Works
Babylon is the first protocol enabling Bitcoin to secure other blockchains without bridging, wrapping, or giving up custody. Your BTC never leaves the Bitcoin network, it's locked in a special Taproot output (a type of Bitcoin transaction) using Babylon's staking script.
This locked Bitcoin has two spending conditions. First, a timelock that allows you to withdraw after a set period. Second, an EOTS (Extractable One-Time Signature) mechanism that enables slashing if validators misbehave. This cryptographic design means your Bitcoin can provide economic security to other networks while remaining on Bitcoin's base layer.
When you stake through Lombard, your BTC is delegated to Finality Providers, specialized validators that sign blocks on Bitcoin Secured Networks. Lombard works with institutional Finality Providers including Figment, Galaxy, Kiln, and P2P.org. These providers earn a commission on staking rewards (currently 8%) and share the remaining yield with delegators like you.
The Security Consortium manages the staking operations. When LBTC supply increases from new deposits, additional BTC is staked. When supply decreases from redemptions, BTC is unstaked. This happens through a daily rebalancing process that maintains the backing ratio.
The Exchange Rate
LBTC uses a non-rebasing model. This means you won't see additional LBTC tokens appear in your wallet as yield accrues. Instead, the exchange rate between LBTC and BTC increases over time.
When LBTC launched, the exchange rate was 1:1 — one LBTC was redeemable for exactly one BTC. As yield accrues from Babylon staking, that rate gradually increases. If the rate is 1.05, each LBTC is now redeemable for 1.05 BTC.
This design has practical benefits. Your LBTC balance stays constant, making it easier to track positions and use in DeFi protocols. The yield is automatically compounded into the exchange rate rather than distributed as separate tokens you'd need to claim or restake.
Minting LBTC
You can mint LBTC by depositing native BTC through Lombard's interface. The process works as follows:
You send BTC to a deposit address generated specifically for your wallet
After Bitcoin network confirmations, the Security Consortium verifies and notarizes your deposit
LBTC mints to your specified address on your chosen destination chain
The entire process is trustless from your perspective. The Security Consortium operates as a distributed validator set — no single member can mint LBTC without supermajority agreement, and the consortium cannot mint LBTC without corresponding BTC deposits verified on the Bitcoin network.
→ How to stake BTC and receive LBTC
Redeeming LBTC
Redemption returns your underlying BTC. When you redeem, your LBTC is burned, the corresponding BTC is unstaked from Babylon, and native BTC is sent to your Bitcoin address.
The unstaking process takes time because the underlying BTC must be unbonded from the Babylon protocol. Expect redemptions to complete within 7-14 days depending on Babylon's unbonding period and network conditions.
You'll receive BTC according to the current exchange rate. If you minted when the rate was 1:1 and redeem when it's 1.05, you receive 5% more BTC than you originally deposited.
Where to Use LBTC
LBTC is an ERC-20 token available on multiple chains, which means it works with existing DeFi infrastructure. Common use cases include:
Lending: Supply LBTC to lending protocols like Aave or Morpho to earn additional yield on top of your base staking rewards. Your LBTC continues to appreciate against BTC while you earn lending interest.
Liquidity Provision: Pair LBTC with other assets in DEX pools. The base staking yield helps offset impermanent loss compared to providing liquidity with non-yielding assets.
Collateral: Use LBTC as collateral to borrow other assets. The yield-bearing nature means your collateral grows in value over time, improving your health factor.
Restaking: Deposit LBTC into restaking protocols like EigenLayer or Symbiotic to earn additional rewards by securing additional networks.
Fees
Minting LBTC is free. Lombard charges no protocol fee for staking. On non-Ethereum chains, Lombard covers minting costs entirely. On Ethereum, you authorize a small network fee in LBTC to cover gas.
The main fee is the Finality Provider commission: 8% of staking rewards. This is deducted automatically before yield accrues to the exchange rate, so the APY you see already reflects this fee.
Unstaking carries a fixed Network Security Fee of 0.0001 LBTC per transaction. This covers Bitcoin network fees and provides economic protection against spam attacks. Lombard states they earn no revenue from this fee.
The minimum deposit is 0.0002 BTC. The minimum redemption is 0.00013300 LBTC (including fees).
BTC.b - Bitcoin Bridged
BTC.b is a non-yield Bitcoin wrapper that maintains a strict 1:1 exchange rate with BTC. Originally created by Ava Labs, BTC.b was acquired by Lombard to offer users a complementary product for use cases where yield isn't the priority.
How BTC.b Works
BTC.b represents native Bitcoin held in reserve — nothing more, nothing less. For every BTC.b in circulation, there's exactly one BTC backing it. The Bitcoin isn't staked, lent, or used for anything else. It simply sits in reserve, verifiable through Chainlink Proof of Reserve feeds that update every 10 minutes.
When you mint BTC.b, you send native Bitcoin to a deposit address generated specifically for your wallet. After Bitcoin network confirmations, the Security Consortium validates your deposit and mints BTC.b to your specified EVM address. The process typically takes about 60 minutes (3-6 Bitcoin confirmations).
Redemption works in reverse. You burn BTC.b, and native Bitcoin is sent to your Bitcoin address. Because there's no staking involved, redemptions don't require an unbonding period — though they still take 6 hours due to security verification processes.
How BTC.b Differs from LBTC
The fundamental difference is simplicity. BTC.b has no yield mechanism, no changing exchange rate, and no staking involved. One BTC.b always equals exactly one BTC.
This simplicity comes with tradeoffs:
Faster redemptions: Because BTC.b isn't staked, there's no unbonding period. Redemptions complete in 6 hours versus 9+ days for LBTC.
Predictable pricing: The 1:1 rate makes BTC.b straightforward for trading, accounting, and applications that need stable Bitcoin representation.
No yield: BTC.b doesn't earn staking rewards. If you're holding Bitcoin long-term, LBTC will outperform BTC.b as staking yield accrues.
Shared security: Despite the simpler product design, BTC.b now uses the same Security Consortium infrastructure as LBTC — the same 15 institutional members, the same CubeSigner key management, the same multi-layer verification.
When to Use BTC.b
BTC.b makes sense when you need Bitcoin representation but don't need or want the yield component:
Trading: If you're actively trading in and out of positions, the stable 1:1 rate and faster redemptions make BTC.b more practical than LBTC.
Short-term collateral: For quick borrowing needs where you'll repay soon, BTC.b's faster redemption means you can exit positions more quickly.
Integration simplicity: Some applications prefer assets with fixed exchange rates. BTC.b is easier to integrate when you don't want to handle exchange rate calculations.
Conversion to LBTC: BTC.b can be converted directly to LBTC through Lombard's contracts if you later decide you want yield exposure.
→ How to mint and redeem BTC.b
Fees
Minting BTC.b is free — you only pay Bitcoin network transaction fees (typically $2-20 depending on network congestion).
Redemption carries a flat 0.0001 BTC fee to cover Bitcoin network fees. There are no spreads, management fees, custody charges, or performance fees. This fee structure is significantly cheaper than alternatives like WBTC, which charges for both minting and redemption.
The minimum minting amount is 0.0002 BTC with no maximum.
BTC.b and LBTC Together
Lombard is the only protocol offering both yield-bearing (LBTC) and non-yield (BTC.b) Bitcoin products. This gives you flexibility to choose the right tool for each situation.
A common pattern is using BTC.b for active trading and short-term needs while holding LBTC for longer-term positions where you want yield accumulation. You can convert between them through Lombard's interface.
Vault Shares
Lombard Vaults provide automated yield strategies for Bitcoin holders who want exposure to DeFi opportunities without actively managing positions.
How Vaults Work
When you deposit into a Lombard Vault, you receive share tokens representing your proportional ownership of the vault's assets. The vault deploys your deposit across various DeFi strategies — lending, liquidity provision, yield farming — and handles all the complexity of position management, rebalancing, and yield harvesting.
Your share tokens work like shares in a fund. As the vault earns yield, the value of each share increases. When you withdraw, you burn your shares and receive your proportional claim on the vault's assets, including accumulated yield.
The vault continuously monitors and rebalances positions to optimize returns within its risk parameters. This includes entering and exiting positions, harvesting rewards, and adjusting allocations based on market conditions.
Lombard DeFi Vault (BTCe)
The Lombard DeFi Vault is the primary vault product, built on Veda infrastructure. It accepts multiple Bitcoin assets including LBTC, wBTC, cbBTC, eBTC, and FBTC. Non-LBTC deposits are converted, and the vault deploys capital across curated DeFi strategies.
Current strategy allocations include lending on Aave and Morpho, liquidity provision on Uniswap and Curve, yield tokenization through Pendle, and leveraged positions through Gearbox. The specific allocation changes based on market conditions and yield opportunities.
For LBTC depositors, this creates yield stacking: you earn base staking yield from Babylon (built into LBTC's exchange rate) plus additional DeFi yield from the vault's strategies.
Withdrawals require a 3-day processing period, and you can only have one pending withdrawal at a time. Important note: regardless of what asset you deposit, withdrawals are always in LBTC. If you deposit wBTC, you'll receive LBTC when you withdraw.
Fees
The vault currently charges no deposit, management or performance fees. Withdrawals incur approximately 0.01% (1 basis point) as a small discount to compensate for Solver gas costs.
Contract Addresses
For developers and users who want to verify they're interacting with official Lombard contracts:
Next Steps
Use LBTC — Step-by-step guide to staking and unstaking
Use BTC.b — How to mint and redeem BTC.b
Bitcoin Vaults — Depositing into Lombard Vaults
Understanding Yield — Deep dive into how LBTC yield works
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