Analysis of Asset Accumulation Strategy in the BTCFi Ecosystem

Recently, with the development of the BTCFi concept, the on-chain liquidity of Bitcoin assets has increasingly attracted the attention of major ecosystems and protocols. With the rise of Bitcoin scaling solutions and BTC LST, BTC is transitioning from a mere store of value to an asset that can participate in more on-chain yield scenarios, significantly enhancing its application potential within the entire DeFi ecosystem.

Core, BOB, and Corn are representative growth cases in the BTCFi field recently: Core focuses on the rapidly growing BTC LST assets; Corn collaborates with Pendle to launch a points derivative gameplay to capture the incremental market; BOB attracts liquidity through a rich ecosystem and liquid staking services. A series of actions around "yield" by each ecosystem has greatly activated the liquidity of BTC assets. As the liquidity of BTC is gradually released, there is still significant growth potential in the on-chain accumulation scale of assets in the BTCFi ecosystem.

Background

BTC asset on-chain flow path

The flow direction of BTC and its anchored assets on the chain can be divided into three layers:

1. First layer: Native BTC
2. Second Layer:
   • Custodial issuance of wrapped BTC
   • Mapped assets running on BTC L2 and sidechains
   • Liquid Staking BTC
3. Layer Three: BTC derivative assets in various downstream DeFi scenarios

BTC asset market status

From the issuance situation of BTC pegged assets on the three major networks of Ethereum, Arbitrum, and BNB, it can be seen that centrally managed wrapped BTC still dominates, with WBTC and BTCB together accounting for more than 75% of the overall circulation. At the same time, LBTC and SolvBTC.BBN and other BTC LSTs have grown rapidly recently, becoming another emerging force in the market.

The main application scenarios for BTC-pegged assets are concentrated in lending protocols. The largest volumes, WBTC and BTCB, account for more than 20% of their respective total supply in the TVL of Aave v3 and Venus protocols, reflecting the demand for stable returns in the BTCFi sector from large funds.

The total market size of BTC LST is approximately 25.1K BTC, with Lombard and Solv Protocol accounting for over 70% of the market share. In addition to lending, the points trading market has become another important downstream application of BTC LST. Avalon and Pendle are the protocols with the highest capital accumulation in the lending and points derivative market segments, respectively.

Asset Accumulation Strategy of the BTCFi Ecosystem

Core: Focus on dual-driven ecological growth of incremental assets and token incentives.

Core is an L1 scaling solution powered by BTC, allowing users to earn yields through non-custodial Bitcoin staking. Currently, the TVL has reached $591.5M, with a growth of 4757.9% over six months. Core's growth strategy includes:

1. Focus on the incremental market of BTC-pegged assets to enhance ecological liquidity and absorb the rapidly growing Solv derivative assets.
2. Build supporting native protocols and quickly integrate with the BTCFi project to establish a complete ecological application.
3. Utilize the airdrop of the native token $CORE and market performance to support the incentive structure, driving participation and asset retention.

Main measures:

• Deep integration and cooperation with Solv derivatives asset
• Led by Colend and Pell Network in the construction of the BTCFi ecosystem
• Support the incentive structure through the airdrop and market performance of the $CORE token.

Corn: Efficiently attracting BTC LST market liquidity through point-based derivative gameplay.

Corn is an emerging ETH L2 network, with the current deposit activity cumulative TVL reaching $425.8M. Its rapid growth is attributed to:

• Collaborating with Pendle to lead BTC LST points derivative gameplay
• TVL BootStrap Campaign attracts initial liquidity

The five BTC LST pools launched in collaboration with Pendle attracted $290.3M TVL, accounting for 11.4% of the total BTC LST market.

BOB: Secure bridging and a strong ecosystem help consolidate assets

BOB is a hybrid L2 network combining BTC and ETH, with a current TVL of $65.7M, primarily from WBTC. BOB's asset accumulation strategies include:

• Launched the one-click liquidity staking service BOB Stake, deeply integrated with multiple DeFi protocols.
• The incentive program BOB Fusion attracts user participation

Summary

Core, BOB, and Corn, as emerging forces in the BTC ecosystem, each have their own characteristics in asset accumulation strategies.

• Core attracts a large amount of assets through deep integration with Solv Protocol and a dual staking mechanism.
• Corn successfully attracted BTC LST funds through Pendle's points derivative gameplay.
• BOB attracts assets through extensive project integration and one-click staking services.

The key to effectively realizing the sedimentation of ecological funds lies in unblocking and incentivizing large-scale incremental anchored assets, and forming combinable yield strategies through diversified DeFi applications. Currently, the TVL of BTC anchored assets on L2 and sidechains is about $1.6 billion, accounting for only 0.14% of BTC's total market value, which indicates significant growth potential in the future.