Lorenzo is dedicated to being the premier bitcoin platform for yield-bearing token issuance, trading, and settlement through Babylon. In doing so, our team is pioneering the first-ever bitcoin liquidity financial layer within the Babylon ecosystem, delivering a seamless and rewarding BTC asset liquidity staking experience for crypto investors.
Users, regardless of their quantity of bitcoin holdings, can easily stake their assets to earn secure native staking rewards. By participating in the Lorenzo DeFi ecosystem, users can also enjoy a wide array of exciting incentives.
To accelerate our ecosystem’s growth, we’ve launched an extensive incentive plan for stakers. This initiative invites more users to discover and benefit from Lorenzo’s innovative, streamlined BTC management and reward mechanisms.
Methods for User Participation in Lorenzo
There are two primary ways to get started earning incentives through Lorenzo.
Stake BTC
Users can stake BTC or other wrapped BTC assets (according to the specific requirements of different Staking Plans) on the Lorenzo platform to receive liquidity staking tokens issued by Lorenzo.
Engagement with the Lorenzo DeFi Ecosystem
Users have the option to utilize their acquired stBTC, Lorenzo’s native liquid principal token (LPT) — a form of liquid staking token that can be thought of as wrapped BTC which represents a depositor’s right to redeem their principal bitcoin deposit balance — to participate in various projects within the Lorenzo DeFi Ecosystem. This participation offers opportunities to earn additional incentives and maximize returns.
Key to both of these opportunity types is how Lorenzo tokenizes incentives.
Tokenizing Lorenzo Incentives
Lorenzo introduces an innovative principal and interest separation mechanism, financing bitcoin liquidity by first tokenizing bitcoin staking into Liquid Principal Tokens (LPTs) and Yield Accruing Tokens (YATs).
Liquid Principal Token (LPT)
Liquid Principal Tokens represent the right to claim the staked bitcoin principal after the staking concludes. For example, if a user deposits 10 BTC into a staking contract, the LPT they receive represents the right to have the 10 BTC returned.
There will be multiple LPTs in the Lorenzo ecosystem, but for now, Lorenzo promotes stBTC (think of this as wrapped Bitcoin) as its official LPT to avoid liquidity fragmentation.
stBTC as an LPT
stBTC is promoted by Lorenzo as the official ecosystem LPT. It is backed by the staked BTC at a 1:1 ratio aggregating all BTC liquidity staked.
Yield Accruing Token (YAT)
Designed to incentivize users to participate in staking and receive stBTC, YATs represent the right to claim yield once the staking period has ended. Each YAT accrues yield from bitcoin staking.
Since YATs can be freely traded, anyone who owns the YAT could use them across other DeFi applications.
Earning For Ecosystem Participation
The Lorenzo incentive program provides rewards through two key components: YATs and Points.
YAT (Yield Accruing Token)
- Purpose: Incentivize users to participate in staking plans.
- Function: Represents rewards claimable at the end of the staking period, including native rewards from staking plans and Lorenzo token airdrops.
Points (Lorenzo Points)
- Purpose: Encourage staking and DeFi ecosystem participation.
- Function: Primarily used for future project token airdrops and other scenarios.
Lorenzo Points System Overview
Our carefully constructed points system incentivizes users to stake and use stBTC in various activities. Here is an overview of the opportunities available:
Base Points
Source
Stake BTC or other wrapped BTC assets (according to the specific requirements of different Staking Plans) on the Lorenzo platform.
The basic point allocation rules may be subject to adjustment in accordance with future event arrangements. We will promptly update you on any changes to these rules.
The primary opportunity currently live for stakers to take advantage of is our recently launched Cap 1 pre-launch staking event for Babylon.
Read our guide to get started:
https://medium.com/@lorenzoprotocol/lorenzo-betanet-101-guide-to-babylon-pre-launch-staking-ba02f9681d2b
Event duration
From 27 May 2024, 1 PM UTC until Babylon mainnet launch or until the Lorenzo staking pool reaches 250 BTC deposited
Staking reward
Users will receive 1,500 points per day for every 1 BTC staked
Points distribution details
- Lorenzo will distribute points proportionally based on the actual amount staked by the user. For example, if a user stakes 1.2 BTC, they will receive 1,800 points (1,500 × 1.2) the next day.
- Lorenzo will distribute points based on the actual number of days participated. For example, if a user stakes 1.2 BTC for a total of 9 days, they will receive 16,200 points (1,500 × 1.2 × 9).
- Based on the above updated rule, for users who participate for more than 20 days, Lorenzo will continue to allocate points at a rate of 1500 points per BTC per day.
Note
For BTC in the pre-staking pool, users can submit redemption requests after August 31, 2024.
Referral Points
Every user will have a promo code that can be shared on Twitter. For every new user you successfully onboard with your promo code to participate in Lorenzo staking, no matter which staking plan they participate in, you will earn 20% of all lifetime Base Points total that they earn through staking. Additionally, the invited user, upon using the referral code, will receive an extra 5% bonus on the base points they earn from staking.
Early Bird Points
Early bird points will be applied to the Cap 1 pre-launch staking event for Babylon and will not be continually applied to additional staking pools.
Source
Lorenzo LRZ Supporters and Lorenzo TVL Campaign waitlist.
Lorenzo LRZ Supporter
LRZ supporter on-chain achievement token holders will receive 2x times points within the first 7 days of their staking taking effect.
Lorenzo TVL Campaign Waitlist
For the stakers on Lorenzo TVL Campaign Waitlist, Lorenzo will offer early stakers 5X, 2.5X, and 1.25X points within the first 7 days of their staking participation.
Collaboration Points
Source
Based on specific collaboration projects (refer to specific announcements).
Example
Babylon Pioneer NFT holders share an additional 5% of the total points generated for the Cap 1 pre-launch staking event for Babylon.
Lorenzo will be allocating a certain portion of extra points for users introduced by partner projects, including Particle Network. For specific arrangements, please follow the official information.
Campaign Bonus Points
Source
For participants using stBTC in DeFi activities during joint campaigns.
Only stBTC TVL that aligns with business goals will be counted, and points standards may vary between different projects
Notes
- Specific details will be provided in event announcements.
- During special events, Lorenzo will take multiple snapshots of the stBTC TVL in the ecosystem.
- Users contributing stBTC will receive points
Community Points
Source
For active participation in community activities and contributions.
Please refer to the community announcement for specific community incentive point rules
Other Points
Any additional point arrangements will be provided in project announcements.
Note
As of the release of this plan, some of the user points that require information from partner projects have not been accounted for yet. Lorenzo will continue to follow up on the progress and provide timely updates to the community.
YAT Rewards
YAT rewards are the basic interest earned from staking specifically designed to incentivize users to engage in staking activities to earn stBTC.
Please note that all BTC and other wrapped BTC assets received by Lorenzo (in accordance with the specific requirements of different staking plans) will be staked on Babylon by Lorenzo immediately upon Babylon’s mainnet launch. The actual progress of staking may be influenced by Babylon’s potential staking limits. Stakers will receive an equivalent amount of stBTC corresponding to the BTC they have staked.
The primary opportunity currently live for stakers to take advantage of is our recently launched Cap 1 pre-launch staking event for Babylon.
This event’s incentives will be composed of YAT rewards and the aforementioned points system. Below are some key details related to YAT design of this event:
- The yield displayed on the official Dapp is the annualized yield.
- The Babylon Cap 1 pre-launch staking event will have a cap of 250 BTC.
- YAT rewards will be distributed proportionally based on the amount of BTC staked by each user.
- Lorenzo will offer an anticipated airdrop value of up to $1.5 million equivalent to users who successfully complete staking. This YAT rewards comprises native rewards from Babylon staking and Lorenzo token airdrops.
- The yield calculation method involves dividing the anticipated airdrop value of $1.5 million by the total amount of BTC currently locked in the pre-staking pool.
- For the pre-stake pool BTC, users can submit redemption requests after August 31, 2024. Please note that if the Babylon mainnet goes live before this date, Lorenzo will proceed with delegated staking. The lock-in period for BTC staked in Babylon will be subject to the Babylon mainnet rules.
FAQs
Q1: What are the specific benefits for staking users?
The benefits for staking users consist of two parts:
- YAT Corresponding Staking Interest: The basic interest earned from staking, which is represented by YAT (Yield Accrued Token).
- Points Rewards: In addition to the basic interest, users will earn extra points rewards for staking. Furthermore, the stBTC obtained through staking can be used to participate in DeFi activities, leading to more diverse incentives and returns.
Q2: Will staking points disappear if stBTC is transferred cross-chain to other ecosystems for DeFi participation?
Staking points will not disappear as they are linked to the EVM address used during staking.
Q3：Will staking rewards and points disappear if stBTC is sold?
Points will not disappear as they are linked to the EVM address used during staking. Rewards follow the YAT and are not affected by the sale of stBTC.
Q4: If stBTC is purchased on the secondary market, will there be Lorenzo and Babylon staking rewards and points?
Purchasing stBTC on the secondary market will not yield staking rewards or points. The YAT and points system are designed to incentivize users to stake and then use stBTC to participate in the DeFi ecosystem.
Q5: After withdrawals are enabled, will users continue to earn interest and points if they withdraw stBTC?
Once users withdraw stBTC, they will no longer earn new interest and points. Users can redeem their accumulated YAT for the project’s interest tokens, with the amount dependent on the user’s proportion of YAT holdings and the total interest tokens provided by the project. To generate new interest, users need to restake their BTC. In the future, Lorenzo also plans to introduce an automatic reinvestment program for stBTC to simplify the liquid staking process for users.
Q6: What are the advantages for early participants?
Early participants can quickly accumulate base points. After reaching the maximum base points, early participants will continue to receive time-weighted bonus points.
