Today, institutional-grade Bitcoin yield protocol Lombard Finance launched Bitcoin Onchain Credit Strategy, a new allocation within its Bitcoin Earn product that connects institutional demand for stablecoin credit with Bitcoin holders seeking yield. Leading global liquidity provider and market maker Flow Traders is among the Strategy’s first institutional participants.
Bitcoin Onchain Credit Strategy leverages Lombard’s staked BTC, LBTC, and wrapped BTC, BTC.b. The Strategy’s three pillars include:
- Symbiotic, a permissionless, multi-asset shared security and restaking protocol that provides collateral delegation, enforced at the protocol level.
- Cap Protocol, the institutional stablecoin credit infrastructure platform that sources financing for borrowers and distributes premiums to depositors.
- Lombard Finance, which provides the vault infrastructure, deposit and redemption management, accounting, and allocation rails.
In order to unlock multi-chain distribution, Lombard uses Chainlink’s Cross-Chain Interoperability Protocol (CCIP) for secure cross-chain deposits of BTC.b from Avalanche into the Ethereum vault.
CCIP was selected because it maintains the industry’s highest level of cross-chain security and is the only interoperability standard to achieve ISO 27001 and SOC 2 Type 2 attestation. Compared to bridge solutions with only one or two centrally controlled nodes, each CCIP bridge lane is secured by at least 16 independent, security-reviewed node operators.
Following a LayerZero exploit that resulted in nearly $300 million in losses across DeFi, Lombard Finance upgraded the cross-chain infrastructure underpinning LBTC and BTC.b to CCIP’s defense-in-depth architecture. Lombard is among numerous top protocols, representing a combined TVL of more than $7.2 billion, to adopt CCIP.
Lombard is the second largest Bitcoin liquid staking protocol in the growing Bitcoin-based lending market, which currently stands at $4.3 billion. Lombard’s automated yield product, Bitcoin Earn, has amassed over $1 billion in deposits from over 38,500 users.
In an official announcement, Lombard Labs’ co-founder and CEO, Jacob Phillips, highlighted how the Strategy establishes a novel source of Bitcoin-denominated yield driven by real financing activity.
“By separating the borrower from the collateral provider, the parties involved have made it possible for regulated, institutional trading firms to tap into onchain credit for the first time. Bitcoin holders are earning yield directly from that demand, not from incentives or speculation, but from real institutional usage.”
“Liquidity providers like Flow Traders use stablecoin financing to efficiently support their digital asset trading operations,” added Michael Lie, Global Head of Digital Assets at Flow Traders.
“Lombard’s Bitcoin Onchain Credit Strategy connects Bitcoin holders with institutional financing activity, driven by real institutional demand and less correlated to DeFi market conditions.”