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Lombard Finance Leads Bitcoin Staking Market With Over $500M

On-chain data from IntoTheBlock shows that only 8.6% of wrapped BTC is staked, indicating the market’s nascency.

Avatar image of Mishael Nwani Mishael Nwani•October 15, 2024
staking
staking

The Bitcoin staking market has opened the doors for investors to use BTC within the decentralized finance (DeFi) sector. Various projects have risen to allow market participants to incorporate their BTC holdings into their preferred DeFi protocol.

One such project is Lombard Finance. The latest data from the blockchain analytics platform IntoTheBlock shows that the project’s flagship product, LBTC, currently leads the Bitcoin staking market with over $500 million in market capitalization.

Lombard’s LBTC Leads

With over 13,000 holders across its ecosystem, Lombard welcomes users to own LBTC, its liquid-staked Bitcoin, to access DeFi services. It entails that BTC holders deposit their holdings into the protocol in exchange for a liquid staking token (LST) with an equal value and utility within the DeFi sector.

IntoTheBlock’s data showed that Lombard’s LBTC is ahead of other Bitcoin-focused LSTs with market caps below $225 million. These tokens include EBTC, PUMPBTC, SWBTC, and SOLVBTC.BBN. The analytics firm added that the Bitcoin staking market has more room for “further growth” since it accounts for only 8.6% of the wrapped Bitcoin market.

Bitcoin Staking Market Grows

Crypto staking is an inherent feature within the proof-of-stake (PoS) consensus mechanism that allows validators to validate transactions and secure the network. For supporting the blockchain, these validators are rewarded with additional crypto assets. The PoS model is also compatible with smart contracts, enabling seamless integration with DeFi protocols.

The Bitcoin network does not possess these features since it uses the proof-of-work (PoW) consensus algorithm. Over the past few years, projects like Babylon have built technologies enabling Bitcoiners to interact with DeFi and staking features.

Recently, some of these projects have captured the attention of institutional and retail investors. On October 14, the Bitcoin staking project Solv raised $11 million to boost its operations, including its LST, dubbed SOLVBTC.BBN. Some of its investors include OKX Ventures, Blockchain Capital, and Binance Labs. The cash inflow brought Solv’s total funding to $25 million and its market valuation to $200 million.

Zest protocol, another Bitcoin staking project, launched its yield-bearing token, BTCz, to blend the leading crypto asset with the DeFi sector.

Mishael Nwani

Mishael Nwani is an avid crypto enthusiast with nearly four years of experience in the industry. Since 2022, he has covered topics across cryptocurrencies, NFTs, artificial intelligence, and financial markets.