Yield
LBTC generates yield by putting your Bitcoin to work securing other blockchains. Bitcoin Earn extends this further, deploying capital across diversified DeFi strategies for automated, Bitcoin-denominated returns. This page explains where yield comes from, how it reaches you, and how Bitcoin Earn puts it all on autopilot.
Where Yield Comes From
LBTC yield comes from Bitcoin staking through the Babylon protocol. When you hold LBTC, your underlying Bitcoin is actively securing Proof-of-Stake networks called Bitcoin Secured Networks (BSNs).
Here's how it works:
Bitcoin provides security. BSNs are blockchains that use Bitcoin as their economic security layer. Instead of relying solely on their native token for Proof-of-Stake security, they tap into Bitcoin's massive capital base. This makes them significantly harder to attack.
BSNs pay for that security. Networks want Bitcoin security because it's valuable. They pay for it in their native tokens, similar to how Ethereum validators earn ETH for securing Ethereum.
Rewards flow back to stakers. Those payments are converted to BTC and distributed to everyone who staked Bitcoin through Babylon. For LBTC holders, this means the value backing your tokens increases over time.
This is native Bitcoin yield, not from lending, not from liquidity mining, but from providing genuine economic security to blockchain networks.
How Yield Reaches You
LBTC uses a non-rebasing model. Your token balance stays the same, but each token becomes worth more BTC over time.
The Exchange Rate
When LBTC launched, the exchange rate was 1:1. One LBTC was redeemable for exactly one BTC. As staking rewards accumulate, that rate gradually increases.
If you minted 10 LBTC when the rate was 1.0, you deposited 10 BTC. A year later, if the rate is 1.01, your 10 LBTC is now redeemable for 10.1 BTC. You earned 0.1 BTC in yield without doing anything.
Why Non-Rebasing?
The alternative is rebasing, where you'd receive additional tokens as yield accrues. Non-rebasing has practical advantages:
Simpler accounting. Your balance never changes unexpectedly. If you hold 10 LBTC, you always hold 10 LBTC.
Better DeFi compatibility. Many DeFi protocols don't handle rebasing tokens well. Non-rebasing LBTC works seamlessly with lending protocols, DEXs, and other applications.
Automatic compounding. Yield is continuously reinvested into the exchange rate. No claiming, no restaking, no gas fees.
Yield Distribution
Yield doesn't distribute at fixed intervals. Instead, the exchange rate updates continuously as rewards from BSNs accumulate in the protocol. The rate you see reflects all accumulated yield up to that moment.
The Yield Stack
Beyond base staking yield, you can earn additional returns by deploying LBTC across DeFi, or let Bitcoin Earn handle it automatically. This creates yield stacking: multiple yield sources compounding together.
Base Layer: Babylon Staking
Every LBTC holder earns this automatically. Your underlying BTC is staked through Babylon, securing BSNs and generating yield. No action required. Just hold LBTC.
DeFi Layer: Additional Yield
You can deploy your LBTC across DeFi to earn on top of base staking yield:
Lending: Supply LBTC to Aave, Morpho, or other lending protocols. Earn interest from borrowers while your LBTC continues appreciating from staking yield.
Liquidity provision: Add LBTC to DEX pools on Uniswap, Curve, or others. Earn trading fees plus any liquidity mining rewards. The base staking yield helps offset impermanent loss.
Vaults: Deposit into Bitcoin Earn for automated yield strategies across multiple protocols.
Restaking: Deposit LBTC into restaking protocols like EigenLayer or Symbiotic to earn additional rewards from securing more networks.
Incentive Layer: Points and Rewards
Many protocols offer additional incentives for LBTC deposits:
Lux rewards: Lombard's points program rewards holding and deploying LBTC with BARD token allocations.
Protocol incentives: DeFi protocols often incentivize LBTC liquidity with their native tokens or points programs.
These incentives can significantly boost total returns, though they vary by protocol and change over time.
Bitcoin Earn
Bitcoin Earn is Lombard's automated yield product. It deploys Bitcoin across a diversified portfolio of strategies through a single deposit, generating competitive Bitcoin-denominated returns across market conditions.
The Meta-Vault Structure
Most Bitcoin yield products make a single bet. They pick a strategy, deploy capital into it, and expose users to whatever happens when market conditions shift. When the strategy works, returns look strong. When it stops working, there is no fallback.
Bitcoin Earn is built differently, acting as a structured meta-vault. Instead of routing capital into a single strategy or a single manager spreading their focus across multiple strategies, it distributes exposure across a set of sub-vaults dedicated to independent managers, each operating in a specific niche of the yield market.
Each sub-vault operates in isolation, with its own logic, risk profile, and return drivers. The allocation layer sits above all of this. Capital flows toward managers based on verified performance under current conditions, not static weightings or predetermined splits. When basis trading delivers strong, risk-adjusted returns during a liquidity expansion cycle, it attracts more allocation. When stablecoin cross-lending arbitrage spreads widen, that niche gets prioritized. The vault continuously rebalances across regimes rather than waiting for a single strategy to recover.
This is what generates more consistent returns over time: the ability to stay productive across different market states rather than being locked into one.
The risk management properties follow from the same structure. Smart contract exposure is distributed. Manager-specific failures are contained within their allocation sizes and cannot affect others. The overall portfolio is never fully dependent on the health of any single protocol or the judgment of any single manager.
How It Works
Deposit LBTC, BTC.b, WBTC, or native Bitcoin. You receive BTCe, a receipt token representing your position in the vault.
Once deposited, your assets are deployed into leading lending and liquidity protocols. The vault actively rebalances to optimize risk-adjusted returns, and all yields are continuously converted back to Bitcoin and automatically compounded. No action required on your end.
You can request a withdrawal anytime. You receive your Bitcoin-backed tokens plus accumulated yield, typically within 14 days.
Strategies
Bitcoin Earn allocates deposits across a diversified mix of onchain strategies: single-sided Bitcoin opportunities (lending, staking, and yield-bearing BTC positions across Aave, Spark, Morpho, and other established protocols), market-neutral strategies (using BTC as collateral to capture funding rates and arbitrage opportunities across lending venues), and select incentive programs (carefully vetted public and private campaigns offering additional returns).
Allocations are actively rebalanced based on performance and market conditions, with strict limits on liquidity, duration, and concentration to any single protocol. All yields are continuously converted back to BTC and automatically compounded, ensuring returns stay denominated in Bitcoin.
Transparency
You can track your position, yields, and strategy allocations in real time. Before depositing, a rewards calculator lets you estimate potential returns over any time period in BTC terms. Once deposited, a live dashboard shows your current APY, total position value, and accumulated earnings. You can also see exactly where your Bitcoin is deployed and how the portfolio is diversified across strategies.
Sentora and Veda
At launch, Bitcoin Earn pilots with Sentora as the first manager. Sentora is an institutional, non-custodial DeFi platform that manages billions in capital across DeFi markets, providing vault curation and advanced risk management.
The infrastructure is built on Veda's institutional-grade technology. It also powers Kraken's DeFi Earn. It brings yield opportunities to hundreds of thousands of users worldwide.
Over time, Bitcoin Earn will onboard additional risk managers to operate vaults within the meta-vault structure, providing greater diversification and access to unique strategies.
Track Record
Lombard's Vaults, the foundation powering Bitcoin Earn, have been operational since September 2024, attracting over $1 billion in cumulative deposits across various market conditions. This 18-month operational history demonstrates experience navigating both favorable and challenging DeFi environments.
Structure and Terms
Bitcoin Earn accepts LBTC, BTC.b, WBTC, or native Bitcoin. You receive BTCe as a receipt token, redeemable for your deposited assets plus yield. The meta-vault allocates to multiple specialized sub-vaults with dedicated professional managers, the first vault is operated by Sentora, with additional managers onboarding over time. Infrastructure is provided by Veda. Withdrawals process within 14 days. The management fee is 0.5%.
Other Vaults
Beyond Bitcoin Earn, Lombard Vaults provide additional automated yield strategies with independent risk profiles and managers. Each vault issues its own share tokens representing your proportional ownership of the vault's assets. As a 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.
Yield Considerations
What Affects Yield
BSN demand: More networks wanting Bitcoin security means more rewards for stakers. As the BSN ecosystem grows, yield potential increases.
Total staked BTC: Yield is distributed across all staked Bitcoin. More competition means lower yield per BTC, though this is balanced by growing BSN demand.
Finality Provider performance: Lombard delegates to institutional Finality Providers (Figment, Galaxy, Kiln, P2P.org) who take an 8% commission on rewards. Their uptime and performance affects your yield.
Yield vs Risk
Higher yield opportunities generally come with additional risk. Base staking is the lowest risk within the LBTC ecosystem, subject to slashing risk (0.1%) and smart contract risk, but no additional DeFi exposure. Manually deploying into DeFi adds smart contract risk from each protocol, plus counterparty risk on lending and impermanent loss on liquidity provision. Bitcoin Earn distributes risk across sub-vaults and managers, but you are still exposed to the aggregate smart contract and market risks of every protocol the vault uses.
Next Steps
Bitcoin Earn — Automated yield strategies
Lux Rewards — Earn BARD tokens for holding LBTC
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