Bitcoin’s liquid staking sector reached a new milestone on August 23 as Lombard Finance unveiled the Liquid Bitcoin Foundation and its native $BARD token. The initiative aims to transform BTC from a passive store of value into a productive asset within decentralized finance ecosystems by issuing LBTC—a yield-bearing derivative backed 1:1 by staked Bitcoin. Lombard’s $6.75 million community sale targeted more than 260,000 existing LBTC holders, fostering governance participation and capital alignment across the emerging liquid staking space.
Liquid staking enables BTC holders to delegate their coins to a network-securing protocol—in this case, primarily via the Babylon protocol—while retaining a liquid, ERC-20 compatible token that accrues staking rewards. LBTC can be deployed across DeFi applications such as Aave, Morpho, Pendle and Ether.fi, unlocking composability and yield strategies previously exclusive to Proof-of-Stake networks. The interoperability design allows LBTC to migrate between Ethereum, Base, BNB Chain and other chains, addressing liquidity fragmentation and expanding use cases for BTC within on-chain capital markets.
The current scale of the Bitcoin liquid staking market remains nascent compared to Ethereum’s established ecosystem. Total Bitcoin LST capitalization stands at approximately $2.5 billion, with Lombard’s LBTC representing roughly $1.4 billion—around 40% of the market share. By contrast, Ethereum’s liquid staking market, led by Lido’s stETH, totals about $38 billion. Lombard’s launch aims to bridge this gap by offering governance rights, fee-sharing mechanisms and research grants funded through the Foundation, thereby incentivizing broader participation and protocol development.
The creation of the Liquid Bitcoin Foundation marks a strategic effort to steward the protocol independently. It will oversee governance frameworks, grant allocations and educational initiatives. Holders of $BARD token will have the right to propose and vote on protocol upgrades, risk parameter adjustments and community funding decisions. The tokenomics model aligns long-term stakeholders with network security by requiring staked $BARD to participate in key governance processes and access specialized yield pools, promoting active engagement rather than passive holding.
Lombard co-founder Jacob Phillips described the launch as “an invitation to the Bitcoin community to shape the future of on-chain capital markets.” Erick Zhang of Buidlpad, which hosted the community sale, emphasized the significance of mobilizing dormant BTC liquidity—trillions of dollars worth of Bitcoin that have historically remained confined to private wallets. Integrating LBTC into DeFi leverages this idle capital, potentially unlocking yield opportunities previously unavailable to Bitcoin holders while reinforcing the network’s security through higher staking participation.
As Bitcoin LST frameworks mature, developers anticipate further innovation around cross-chain yield aggregation, risk management tools and wrapped asset interoperability. Lombard’s BARD token and Foundation provide a governance architecture designed to adapt to evolving market demands, offering grant programs, hackathons and research collaborations to enhance protocol robustness. The broader industry will monitor whether Bitcoin liquid staking can replicate Ethereum’s DeFi growth trajectory, drawing new users into a multi-chain digital asset economy and redefining the utility model for BTC beyond its role as “digital gold”.
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