Matt Ye of Lorenzo Protocol Discusses Liquid Staking Bitcoin and Lorenzo's Vision

Transcript

so what um yeah what's Lorenzo so we we we've talked we've hinted a little bit about what Lorenzo is as a as a liquid staking platform yeah for for Bitcoin what does that mean I think people in people's minds liquid staking for POS chains just it's like a concept that makes sense that they can um that they can understand but in terms of Bitcoin it's it just feels like such a departure from liquid saking and POS so how does that all work and how does Lorenzo make it happen yeah so um it's kind of it's kind of interesting I think like eth and and the Bitcoin in terms of liquid staking the Dynamics there is totally different it is totally different so if you look at East so East is a liquid

assets already basically you can East for everything on ethereum chain and for like having uh East staking on like on a financial way is just to providing you to incentivize you to lock up uh East so that uh it just like don't keeps like uh it keeps like inflating and it just don't keep like East for losing its value right so in a way so uh like staking East is actually a way for you to lock up liquidity right and also like liquid staking is just another thing to like release that locked up liquidity to do some like Downstream stuff it's like a yield bearing it's like a a e yield bearing asset investment that you can hold right this is one thing but for Bitcoin like staking and also Bitcoin

liquid staking it's kind of very different situation is that a lot of the Bitcoin are like they're already idle they're not liquid at all it's it's it's un like East it has been like liquid in the since the beginning it was created and then uh you want them to be in a lock up state right so to to like to reduce kind of inflation the impact of inflation or to balance inflation and things like that but for Bitcoin there's no such an inflation situation and a lot of the Bitcoin are are like has has been idle like for decade so it's not really uh to lock up liquidity but it's more like you already in an idle State you are already ill liquid why don't you

like incentivize I should be incentivizing you into doing something great right and what is like liquid staking in this context is that for all these put into like staking uh btcs we're going to issue like liquid staking tokens which are smart contract based assets on all of these different chains and to really like to mobilize liquidities from idol being uh active and being liquid and being used in all of the ecosystem so in the let's just like to to to to summarize that so for East it's more like to lock up liquidities to balance inflation but while in a Bitcoin space it's actually to mobilize idle Bitcoins and to encourage them to be put into good use

and into a more liquid state so the situation is totally different yeah no absolutely that makes sense I mean like the equivalent I guess if if you were to think in a in a sem like in semantic terms the equivalent the real equivalent between liquid state eth say and like the equivalent in Bitcoin would be to have some sort of a liquid token that represents mining shares let's say like uh the shares in a minor that are generating yield like you would have a token that represents these shares but here you know Bitcoin is not being used like the the liquid Bitcoin on the liquid on the Bitcoin network is not being used to secure the network uh and so it's not locked and so you don't have

this uh the same problem as you do in proof of stake chains where you can choose to stake your assets to combat inflation and generate staking yield or you can choose to utilize your assets in in defi um so the the the the sort of like different semantics here are are are obvious what why are we calling it then liquid stake Bitcoin if it's the if the if the Bitcoin is not being staked you know is that an appropriate term to describe this this thing that's you know at the at the base layer very different than on P chain uh yeah so I I think that the here the thing is that comparing to like different sit like previous situation is that so previously so there's not enough

like incentivization for you to use rap the Bitcoin even I mean if you see like wbdc wbdc does not provide you like good incentives for you to wrap them and also put into a liquid state right so what would be a better way to mobilize them it's actually if you think about the real uh the liquid staking assets it's actually not just about the BDC principles but also it covers the part for like the potential yield from different kind of yield sources right so I mean if you say like okay like wrapping it into smart uh like tokens like smart smart contract assets is not uh interesting enough to you and now we have some like rewards and incentives for you to do that right so the RTS in a sense it's like a BTC Bond right it's not just have the principle it also

having the yield I mean if having WRA a token is not interesting enough for you then why about like how about like the principal plus the yield so this should be like a more interesting thing to mobilize liquidities into it so this is like one thing and also that's why we have like this two token standards like dual dual token like kind of systems we have sbdc representing the principal part and also we have yat to represent the the future yield part uh of the of the of the system basically all right let's get into that let's let's get into that that that dual token model so there's the the lpt token which is the liquid principal token you just mentioned and the yield uring token where is this yield coming from and um yeah how should people be

thinking about like holding these two tokens how do we interact with each other Etc yeah so uh I think the yield comes from like two two different major sources one is from like say bobl and staking right so if you just say okay here's like one chain let's say chain a so chain a is taking BDC share security and also uh it provides yield for like the stakings so this is where this yield comes from right this is like one thing and also two another way we think about it is that like we could actually having some strategies in terms of staking let's say there are 300 like different chains for you to stake to or even more let's say like 3,000 like chains for you to to stake to the same way as like there could be 300 tickers uh 3,000 tickers that you can purchase on an ndaq

market then which one do you want to purchase right so uh another uh way to do it is like you could actually stick to some you know delegate uh strategies which deploys like BDC sing on behalf of you under some kind of strategies or under some rules it's something similar to like mutual fund or like an ETF right just say I don't know any of these like 3,000 POS and you are an expert I'm trusting you I'm giving you like lending you my BDC you do your own like Discretions on that you deploy my capitals and you give me a higher than expected yield so that's also like another sort of products on the market as well so for the yeld part like I said it could be uh either one from like roll stakings if you want to like do your own

homework make your own sanities on that and decide like pick which uh handpick which chain that you want to stay to this is like one thing or it could be from like delegate to some strategies that you think that makes sense or someone else is doing the work for you and doing the research for you and just like waiting to you're just like waiting for for the yield to come so these are like the two two types uh of the yield that in mind mind [Music] [Music]