Conclusion

Lorenzo Protocol offers an essential infrastructure for the issuance, DeFi support, and settlement of Bitcoin staking tokens. As a liquidity finance layer, it aims to streamline the staking process and provides innovative solutions for liquid staking by separating Liquid Staking Tokens (LSTs) into Liquid Principal Tokens (LPTs) and Yield Accruing Tokens (YATs), both of which enhance the fluidity and accessibility of Bitcoin staking. Leveraging a blend of centralized and decentralized elements, Lorenzo addresses the challenges associated with Bitcoin’s limited programmability for tokenization of Bitcoin staking, and introduces a mechanism that provides substantial flexibility and security to Bitcoin stakers.