Lorenzo is currently focused on on-chain asset management, dedicated to bringing traditional financial products on-chain through tokenization technology and seamlessly integrating with the DeFi ecosystem.

Written by: 1912212.eth, Foresight News

The crypto market is by no means a haven for gambling and speculation; it still has many real pain points that remain unmet, and the efficiency of capital utilization still needs to be fully explored and released. Maximizing the capital efficiency of BTC is one of them. The trillion-dollar market of Bitcoin liquidity has attracted numerous blockchain projects, and Lorenzo, as a well-developed BTCFi, once led the market trend. In 2024, it integrated with over 20 chains and more than 30 DeFi protocols to provide stable yield services for BTC assets valued at over $600 million. However, the vast crypto market is not limited to Bitcoin. With the continuous growth of stablecoins, DeFi, and RWA, focusing solely on Bitcoin as a single asset is far from meeting market demand. As institutional demand grows and the trend of merging CeFi and DeFi accelerates, evolving into an on-chain investment bank has become an inevitable choice.

Since 2020, DeFi's total locked value has once exceeded $250 billion, becoming the core engine of the crypto market. However, in the field of on-chain asset management and yield generation, complex operations, high gas fees, and fragmentation between protocols make it difficult for institutions and ordinary users to participate widely. DeFi's yield models often rely on short-term incentives, lacking long-term stability, and are unable to meet institutions' needs for risk management and stable returns.

At the same time, the construction of on-chain yield infrastructure lags far behind the growth of crypto assets. PoS chains like Ethereum support staking, but the integration of cross-chain liquidity and asset management is insufficient, leading to low capital efficiency. The rise of PayFi has promoted the integration of on-chain payments and financial services, while the demand for tokenization of traditional financial products has surged. The trading volume of stablecoins has now surpassed the combined total of Visa and Mastercard, with over $160 billion in stablecoins circulating on-chain. However, the infrastructure for managing and deploying these funds to generate yields is still lacking. Institutional investors are eager to bring mature financial tools from CeFi into DeFi, but existing platforms lack a unified framework to achieve this goal.

Lorenzo Protocol sees a greater market opportunity in this and naturally ventures into "on-chain investment banking" to accommodate more complex asset structures and higher-level financial service demands.

From BTCFi to Institutional-Level On-Chain Asset Management: Advancing to the Financial Abstraction Layer

Based on the technology and capital accumulated in its past Bitcoin liquidity ecosystem, Lorenzo Protocol has further upgraded to an institutional-level on-chain asset management platform. By tokenizing CeFi financial products and deeply integrating with DeFi scenarios, it fills the gap in on-chain asset management, providing safe, efficient, and transparent solutions for institutions and high-net-worth users. In short, it transforms core crypto assets like Bitcoin from a single value store into financial primitives for on-chain asset management, offering users a one-stop asset management experience.

Lorenzo's core advantage lies in its Financial Abstraction Layer (FAL), a modular financial framework that can abstract the processes of asset management and yield generation. It supports the tokenization of assets like BTC, generating tradable on-chain tokens. At the same time, Lorenzo transforms asset custody, yield generation, and strategy management into standardized components native to the chain, achieving seamless integration between CeFi financial products and on-chain financial scenarios.

Lorenzo operates more like an "on-chain investment bank." After receiving assets like Bitcoin and stablecoins, it packages them into standardized yield products through strategies such as staking, arbitrage, and quantitative trading, making them available for one-click integration by partners like wallets, PayFi, or RWAFi.

On April 18, 2025, Lorenzo Protocol completed its IDO through Binance Wallet and PancakeSwap, issuing the governance token BANK (total supply of 2.1 billion, initial circulation of 425 million). The TGE attracted over $35 million in subscriptions, with the overall subscription amount oversubscribed by 18,329%, achieving its fundraising goal in less than a minute after launch. Since the IDO, Lorenzo has evolved from focusing on the "Bitcoin liquidity financial layer" to becoming an institutional-level on-chain asset management platform, concentrating on the tokenization of CeFi financial products and integrating them with DeFi.

Through a unified financial framework, Lorenzo abstracts on-chain asset management and yield generation, providing seamless interaction experiences for institutions and users. Additionally, Lorenzo focuses on real yields and sustainable business models: it provides stable returns through DeFi yield aggregation and tokenized financial products, with its revenue sources coming from protocol fees, cross-chain bridging fees, and ecosystem partnership shares. The governance mechanism of the BANK token (veBANK) further incentivizes community participation, ensuring long-term stability.

In the future, Lorenzo plans to consolidate its leading position through technological optimization, ecosystem expansion, and community empowerment (level systems and task rewards).

Operational Logic

Lorenzo's product design and technical architecture revolve around the core needs of institutions and on-chain asset management, covering asset tokenization, yield generation, cross-chain liquidity, and risk management.

Lorenzo has built a clear and sustainable asset circulation path: first, users deposit on-chain assets like stablecoins into shared accounts with Lorenzo and partners (such as PayFi or RWAfi platforms) as the basic input. These assets are deployed into multiple on-chain protocols through strategy modules designed internally by Lorenzo to generate stable yields, forming the first layer of asset appreciation.

Subsequently, these yield-bearing assets (or marked certificates) are standardized and packaged as composable asset modules, further integrated into PayFi products, wallet yield accounts, deposit ends of lending protocols, and RWA platforms, thus completing yield reuse and value amplification. Throughout the process, users receive continuous yields, while the Lorenzo protocol achieves a logical closed loop of asset inflow, yield generation, and re-circulation, enhancing the system's reuse efficiency and capital utilization.

Lorenzo's core products mainly consist of three parts. The first is the Vault model, which is divided into simple strategy pools and composite strategy pools. In the simple strategy pool, each Vault corresponds to a specific yield strategy, with a clear structure and transparent execution; while the composite strategy pool further aggregates multiple simple pools, dynamically managed and rebalanced by individuals, institutions, or even AI, achieving more flexible yield optimization.

The second part is modular API output. Lorenzo provides a series of interfaces that output the logic of yield calculation and distribution, asset value status data, and front-end UI components that can be directly integrated, facilitating rapid onboarding for ecosystem projects.

The final part is the tokenization capability of financial services, covering the entire process from on-chain fundraising to off-chain operations and back to on-chain fund settlement, bridging the connection between traditional financial services and on-chain asset management.

Conclusion

Lorenzo Protocol successfully fills the gap in on-chain asset management by tokenizing CeFi financial products and deeply integrating with DeFi scenarios. Its Financial Abstraction Layer releases the liquidity and yield potential of assets like BTC, providing safe, transparent, and efficient asset management solutions for institutions and high-net-worth users. From the "Bitcoin liquidity infrastructure layer" to attracting market attention with its IDO, Lorenzo has not stopped its progress. On the journey towards the "Financial Abstraction Layer," Lorenzo truly demonstrates its determination for long-term construction and forward-looking vision.

Ethena, as one of the leading stablecoin projects in this cycle, has seen its tokenized dollar USDe market cap continuously soar. The ability to achieve hundreds of millions in market scale by tokenizing a single financial asset, coupled with the support for various financial products' tokenization and full integration, positions Lorenzo as a potential pioneer in on-chain asset management, leading a new wave in crypto finance.

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