Understanding Yield
Your LBTC earns Bitcoin yield automatically. There is nothing to claim — the value of your LBTC in BTC terms increases over time.
How It Works
LBTC yield comes from Bitcoin staking on Babylon. Here is the flow:
- Lombard stakes your BTC with Finality Providers on Babylon
- Babylon rewards stakers in BABY tokens for securing the network
- Lombard sells BABY for BTC and adds it to the reserve
- The LBTC/BTC exchange rate increases to reflect the additional BTC
You do not need to do anything. Your LBTC automatically represents more BTC as yield accrues.
Exchange Rate
When LBTC launched, 1 LBTC = 1 BTC. As yield accumulates, the exchange rate increases:
| Time | Rate | BTC Value |
|---|---|---|
| Launch | 1.0000 | 1.0000 BTC |
| +30 days | 1.0007 | 1.0007 BTC |
| +1 year | 1.0081 | 1.0081 BTC |
Example based on ~0.81% APY. Actual rates vary.
What This Means For You
When you stake: You receive slightly less than 1 LBTC per BTC deposited (because LBTC is already worth more than 1 BTC).
When you unstake: You receive the full BTC value of your LBTC at the current exchange rate.
Example: If you deposit 1 BTC when the rate is 1.0050, you receive ~0.9950 LBTC. If you unstake when the rate is 1.0100, you receive ~1.0050 BTC (a gain of 0.0050 BTC).
Current APY
The yield rate depends on Babylon staking rewards, which fluctuate based on:
- Total BTC staked across Babylon
- Number of Bitcoin Secured Networks (BSNs) being secured
- BABY token price when sold for BTC
Check the current 14-day trailing APY at lombard.finance .
Yield Distribution Timeline
| Date | Event |
|---|---|
| Before July 22, 2025 | Users claimed BABY manually from the Lombard app |
| July 22, 2025 | LBTC became yield-bearing; all yield now auto-compounds |
| Ongoing | BABY rewards sold for BTC, exchange rate updated periodically |
Any BABY you did not claim before July 22, 2025 was redistributed to LBTC holders automatically.
Comparing Yield Sources
You can stack these — LBTC earns Babylon yield while deposited in DeFi protocols.
Yield FAQ
Do I need to claim yield? No. Yield is reflected in the LBTC/BTC exchange rate automatically.
Is yield paid in LBTC or BTC? Neither directly. The exchange rate increases, so your existing LBTC becomes redeemable for more BTC.
Does yield compound? Yes. As the exchange rate increases, your LBTC is worth more BTC, which continues earning yield.
What if I buy LBTC on a DEX instead of staking? You earn the same yield. All LBTC is fungible. It does not matter how you acquired it.
Next Steps
- Fees — Understand all costs associated with LBTC
- Access DeFi — Deploy LBTC for additional yield on top of Babylon staking rewards
- FAQ — More questions about LBTC