📝 Editor's Note:

While Bitcoin's core protocol remains relatively static and unchanged, systems to extend the asset's capabilities have grown and changed immensely.

Case in point — users have wrapped over 364,878 BTC, worth over $38B dollars, into bridgeable assets, according to the data provider Bitcoin Layers. This is a major change from BTC's early years, as it's clear there's demand from traders and investors to generate yield with the token on other networks, as opposed to just holding it.

We'll hear more on the growth of BTC's broader ecosystem below thanks to contributions from Kairos Research, Seoul Data Labs, Daedalus Angels, and Aptos.

– ON Editorial Team

Lombard | cbBTC | BoB | BTCfi on Aptos

• Lombard provides users with a way to turn their otherwise idle BTC into LBTC, a yield-generating asset. There has been a notable drop off in LBTC-denominated TVL units, primarily driven by the end of the BOYCO incentive program, a large part of which was facilitated via ether.fi vaults. However, the amount of LBTC on Aave has continued to climb higher. This is a noticable trend we see amongst other analgous products like liquid staking tokens (LSTs) and liquid restaking tokens (LRTs) for ETH, where the majority of the supply is on lending markets. Aave is now leading its peers with a 32% of the marketshare for LBTC utilized in DeFi.

• While the overwhelming majority of LBTC is used on Ethereum, its important to look elsewhere too. While Berachain had a large dropoff, other chains like Sui have seen a steady and continued inflow. The amount of LBTC on Base has also shown steadiness over the last several months.

• When looking at LBTC amongst its peers, the Bitcoin-backed asset continues to maintain the most marketshare for both staked, and restaked Bitcoin products, with approximately 50% marketshare against similar BTC LST products.

• With 43k cbBTC ($4.5B) in circulation, cbBTC is rapidly gaining traction in the wrapped Bitcoin market following its launch in September 2024. Ethereum and Base dominate in terms of networks for the asset. The chains account for 64.1% and 30.3% of the total supply. cbBTC is also steadily expanding its presence on Solana, which has 5.4% of its supply, and Arbitrum, which has 0.2%. As integration across protocols increases, cbBTC is well-positioned to capture more market share across ecosystems.

• Circulating supply of cbBTC on Base has grown with its share increasing from the low 20% range to 30%. This growth was primarily driven by net inflows into Morpho Blue, which added approximately 4,000 cbBTC over the past 30 days.

• Interestingly, the average cbBTC held per address on Ethereum is 0.658, which is significantly higher than on other chains where averages range from just 0.01 to 0.04 cbBTC. This difference is primarily due to Aave v3 on Ethereum, which currently holds 12k cbBTC as collateral.

• As Bitcoin Layer 2s (L2s) and BTCfi took center stage at last week’s Bitcoin Conference, BOB has successfully differentiated itself as the most active hybrid L2. An OP Stack rollup that aims to natively support the Bitcoin stack, BOB currently sits at eleventh across all L2s, per L2BEAT, with $219M in current TVL. The wrapped Bitcoin token, uniBTC, accounts for just over $43M of BOB's TVL followed by SolvBTC Babylon, which contributes $42.4M and WBTC at $33.8M.

• BOB’s key onchain metrics continue to point to steady adoption, with 1.8M transactions and roughly 68,000 unique users recorded over the past 30 days. On a weekly basis, BOB currently records almost 500k transactions and between 25k and 30k unique users.

• The steadfast activity now brings BOB just 3,500 shy of clocking in half a million unique users since launch.

• BTCfi is heating up on Aptos, which houses nearly $400M in BTC-pegged assets. In the past week alone, ~$30M has been added following the arrival of OKX’s xBTC, a wrapped token that maintains a 1-to-1 ratio with Bitcoin. xBTC, which has $40M in assets on Aptos, has already integrated across Aptos apps, including Aries Markets, Echo Protocol and Hyperion — all of which rank among the top six projects on Aptos by TVL.

• Integral to the growth of BTCfi on Aptos is Echo Protocol, a Bitcoin stake & yield project that makes up ~70% of BTC supply on Aptos. The second-largest Aptos project by TVL, Echo, has $878M in TVL. Users can easily acquire, hold and earn yield on BTC via Echo’s aBTC.

• Aptos is fast becoming a key venue for BTCFi, offering a secure, fast & affordable Move Virtual Machine environment for users to participate in attractive BTC yield opportunities via OKX Earn and Aptos DeFi apps. Beyond aBTC and xBTC, Aptos supports Echelon Market’s SBTCZ, valued at $83M on the chain, and Aries Markets’ WBTC, valued at $11M.