A New Era for Lombard
Since the acquisition announcement, Lombard has 2 key products:
1. LBTC - 10,959 BTC
2. BTC.b - 5,019 BTC
This is a turning point for the company, clearly demonstrating their future vision.
Let's dig in.
What's the problem with LBTC?
LBTC is yield-bearing BTC, which earns yield from staking on Babylon. However, this has several problems:
- currently low yield
- yield is entirely dependent on the BABY reward
- it's not a native token, it's an LST
The 3rd point is the most important in terms of the company's longterm vision and growth. LBTC is essentially an LST, i.e., an analogue of stETH (Lido) and weETH (EtherFi).
In other words, it's a DeFi primitive on top of the underlying asset.
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There's nothing bad with that, but it significantly limits the project's potential.
First, it relies on external infrastructure – Babylon.
Second, it's suitable for people familiar with DeFi, which raises the following problem.
Third, it's difficult for the average user to understand.
Imagine your parents bought BTC.
How would you explain to them what LST is, what Babylon is, why LBTC's value is rising on its own, how to manage LBTC in DeFi, and why it's safe?
This model is inherently more complex, as it contains many components. This discourages the average user due to its complexity, and large BTC holders are discouraged by the many additional risks.
BTC.b solves this problem because it's extremely simple and easy to explain:
- a decentralized wrapper for BTC
- a decentralized analogue of WBTC, cbBTC
- accessible to any user
The team understood this well and sought a way to create such a product. That's why they acquired BTC.b, simultaneously acquiring an established business with good distribution.
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BTC.b has the potential to be several times, even dozens of times, larger than LBTC, because its model is more suitable for a wider audience and is easier to market.
BTC.b is expected to become the token that will dethrone the established WBTC and cbBTC.
And the team's main efforts will be focused on this product.
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