The Bitcoin liquid staking landscape is undergoing rapid transformation, unlocking new layers of utility for the world’s most trusted cryptocurrency. As developers expand Bitcoin’s role beyond a digital store of value, liquid staking protocols are emerging as key infrastructure to bring yield-generating capabilities and DeFi interoperability to BTC holders—without sacrificing asset liquidity.
These protocols enable users to stake their Bitcoin and receive a tokenized representation (often called a Liquid Staking Token, or LST) that retains both liquidity and earning potential. By leveraging innovations like Babylon, which allows Bitcoin to be natively used in proof-of-stake (PoS) consensus mechanisms, these platforms are redefining how Bitcoin participates in decentralized finance.
Below, we explore the most prominent Bitcoin liquid staking solutions shaping the future of BTCFi (Bitcoin Financial Infrastructure).
Lorenzo Protocol: Pioneering Tokenized Yield and Principal Separation
Lorenzo Protocol stands out as one of the first live Bitcoin liquid staking platforms built on Babylon. Its core innovation lies in splitting staked Bitcoin into two distinct tokens:
- LPT (Liquid Principal Token) – Represents the right to redeem the original BTC principal.
- YAT (Yield Accumulation Token) – Captures all accrued staking rewards over time.
This separation empowers advanced DeFi strategies such as circular staking and leveraged staking, where users can borrow against their LPT to stake more BTC and amplify returns—boosting capital efficiency across ecosystems.
Key features:
- No minimum staking requirement
- Native integration with Babylon’s shared security model
- Supports multiple Bitcoin Layer 2 networks
- Fully decentralized and non-custodial design
By enabling BLSPs (Bitcoin Liquid Staking Programs), Lorenzo allows projects to define specific use cases for staked BTC—such as securing appchains—while offering transparent reward structures. This makes it a powerful tool for developers and investors alike.
👉 Discover how to maximize your Bitcoin yield with next-gen staking tools.
Bedrock: Multi-Asset Re-Staking with Centralization Trade-offs
Bedrock operates as a multi-asset liquid re-staking protocol, supporting not only Bitcoin but also ETH and IOTX. It partners with RockX and leverages Babylon to re-stake wBTC (Wrapped Bitcoin) via its uniBTC product.
While this expands access to staking rewards across chains, it introduces notable trade-offs:
- Relies on wBTC, a centralized asset backed solely by BitGo
- Uses a unified token model (uniTokens) where value appreciates over time instead of minting new tokens
- Integrates with EigenLayer for additional yield layers
The uniToken design ensures continuous value growth per token, benefiting long-term holders. However, reliance on wrapped assets may deter purists seeking native Bitcoin exposure.
Nonetheless, Bedrock’s support for cross-chain re-staking makes it an attractive option for users already active in Ethereum-based DeFi.
pSTAKE Finance: Binance-Backed Entry into BTC Yield
Backed by Binance Labs, pSTAKE Finance aims to bridge Bitcoin with PoS ecosystems using Babylon. Currently, users can deposit up to 50 BTC, though unstaking is not yet supported in v1.
Notable aspects:
- Native PSTAKE token for governance and incentives
- Plans to launch yBTC—a yield-bearing LST—on Ethereum in late 2024
- Future support for wBTC staking
- Focus on auto-compounding yields and broad DeFi integration
Although still evolving, pSTAKE represents a major institutional push toward making Bitcoin productive within DeFi.
Swell Network: Bringing Re-Staking to Wrapped BTC
Traditionally an Ethereum-focused liquid staking provider, Swell has expanded into Bitcoin with swBTC, an ERC-20 token that enables yield generation from wBTC across re-staking protocols like EigenLayer, Symbiotic, and Karak.
Users benefit from:
- Non-custodial staking directly from wallets
- Liquidity through swBTC usage as collateral in lending markets
- Exposure to multiple yield sources simultaneously
Swell’s approach simplifies access for existing DeFi users but remains limited to wrapped Bitcoin rather than native BTC.
UTXO Stack: Honoring Bitcoin’s Architectural Roots
UTXO Stack differentiates itself by embracing Bitcoin’s foundational UTXO model, unlike most EVM-centric solutions. Backed by OKX Ventures, CMS Holdings, and Matrixport, it integrates with RGB++ and Nervos Network to enable secure, scalable Bitcoin Layer 2 development.
Its unique value proposition includes:
- Asset issuance and execution via RGB++ with settlement on Bitcoin
- Transaction folding to reduce fees
- Tight coupling with Bitcoin’s base layer for enhanced security
However, integration with Nervos may alienate some Bitcoin maximalists who prefer pure on-chain solutions.
Nomic: Cosmos-Based BTC with Dual Staking
Nomic is a Cosmos-based Layer 1 aiming to bring trust-minimized Bitcoin into the IBC (Inter-Blockchain Communication) ecosystem. It plans to issue stBTC through Babylon integration, allowing users to earn rewards while maintaining liquidity.
Highlights:
- Dual staking: both BTC and native NOM token secure the network
- Real BTC backing nBTC, which is transferable across IBC chains
- Testnet live with mainnet upcoming
Nomic offers a compelling path for Bitcoin interoperability within the rapidly growing Cosmos DeFi space.
PumpBTC: Speed-Focused Re-Staking with Third-Party Custody
PumpBTC emphasizes speed and accessibility, letting users stake derivative BTC tokens (wBTC, BTCB, FBTC) across EVM chains and receive liquidity tokens instantly—bypassing traditional waiting periods.
Additional perks:
- Partnership with custodians Cobo and Coincover
- Audited by BlockSec
- Earn PumpBTC points alongside Babylon rewards
While future plans include native BTC staking, current reliance on third-party custody raises decentralization concerns.
Lombard: Building LBTC as the Standard for DeFi
Lombard is developing LBTC, a 1:1 yield-bearing version of Bitcoin designed to become the primary form of BTC in DeFi. Currently in private testnet, it offers:
- Seamless cross-chain movement of yield-generating BTC
- Rewards from PoS staking, Lombard points, and DeFi opportunities
- Backed by institutional names like Franklin Templeton and Polychain Capital
Lombard envisions Bitcoin not just as digital gold, but as the ultimate collateral across all DeFi applications.
👉 See how institutional-grade yield solutions are reshaping Bitcoin finance.
Chakra: Self-Custody via Zero-Knowledge Proofs
Chakra leverages zero-knowledge proofs (ZKPs) and MPC technology to offer self-custodial Bitcoin re-staking. Users can stake without transferring assets out of their wallets—enhancing security.
Features:
- Issues ChakraBTC and ChakraETH
- Acts as middleware between Bitcoin and its Layer 2s
- Supports AI, gaming, and DeFi applications secured by re-staked BTC
Chakra’s ZK-powered architecture sets a new standard for privacy and scalability in BTCFi.
Solv Protocol: Unified BTC Liquidity Across Chains
Solv Protocol introduces SolvBTC, a unified liquidity asset backed by real Bitcoin. Key components include:
- LCN (Liquidity Consensus Network) – Manages decentralized BTC reserves
- UTXO-3525 – Enables non-custodial cross-chain transfers of BTC and Ordinals/Runes
- Compliance Bridge – Allows traditional finance participation
With audits from CertiK and Quantstamp, Solv combines security, regulatory adaptability, and multi-chain support—making it ideal for institutional adoption.
Acre: tBTC-Powered Staking with DAO Governance
Acre uses the decentralized bridge tBTC instead of Babylon, offering greater trustlessness compared to wBTC-based systems. When users deposit BTC, they receive stBTC, which gains value over time through yield accrual.
Additional benefits:
- Earn Acre points and participate in DAO governance via ACRE token
- Integration planned with Mezo Bitcoin L2
- Operates on Ethereum with strong DeFi compatibility
Acre provides a robust alternative for users prioritizing decentralization over native Babylon integration.
Frequently Asked Questions (FAQ)
Q: What is Bitcoin liquid staking?
A: It allows BTC holders to stake their coins and receive a liquid token (LST) that represents both ownership and earning potential—enabling use in DeFi while earning yield.
Q: Are these protocols safe?
A: Safety varies. Protocols using native Bitcoin (via Babylon) or tBTC tend to be more decentralized than those relying on wBTC. Always review audit reports and custody models.
Q: Can I unstake my Bitcoin anytime?
A: Not always. Some platforms like pSTAKE currently don’t allow unstaking in early versions. Check each protocol’s withdrawal policies before depositing.
Q: What are Liquid Staking Tokens (LSTs)?
A: LSTs are tokenized representations of staked BTC—like stBTC or LBTC—that can be traded, lent, or used as collateral while accruing rewards.
Q: Why does principal/yield separation matter?
A: Splitting principal (e.g., LPT) from yield (e.g., YAT) enables sophisticated strategies like leveraged staking and risk-managed exposure—key for institutional-grade DeFi.
Q: Is wrapped Bitcoin (wBTC) risky?
A: Yes. wBTC is centrally custodied by BitGo, introducing counterparty risk. Alternatives like tBTC or Babylon-based solutions offer more decentralization.
👉 Start exploring high-yield, liquid staking opportunities for your Bitcoin today.
The evolution of Bitcoin liquid staking marks a pivotal shift—from passive holding to active participation in global DeFi. With protocols like Lorenzo, Lombard, and Solv leading innovation in BTCFi, the line between digital gold and productive capital is blurring. As Babylon matures and adoption grows, expect even deeper integration between Bitcoin’s security and the dynamic world of decentralized finance.
Core keywords: Bitcoin liquid staking, LST, Babylon, BTCFi, yield-bearing Bitcoin, decentralized finance, proof-of-stake, re-staking