In the crypto world, USDT / USDC defines the starting point of stablecoins. In the Bitcoin capital market, Lombard is likely to follow a similar path. However, many people tend to classify Lombard as an LST protocol, but its essence is closer to that of an issuer.
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Similarity of business models
The logic of Lombard is almost identical to that of Tether/Circle:
※ Tether/USDC: Users deposit US dollars → Issue USDT/USDC → Invest the underlying US dollars in US Treasury bonds to earn interest.
※ Lombard: Users deposit BTC → Issue LBTC → Invest BTC into Babylon, Vault, Basis-trade strategies to earn interest.
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Key differences
※ Tether/Circle: The profits belong to the company, and users only have the right to use. ※ Lombard: The profits mainly belong to the users, and the protocol only takes a small fee.
This seems like a detail, but it is the fundamental difference between Web2 and Web3. The former is a platform revenue logic, while the latter is a protocol revenue logic.
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Why is it important?
Today, Tether/Circle, relying on a 3-5% yield from U.S. Treasury bonds, has become the king of cash flow in the crypto market with annual profits measured in billions of dollars. Lombard is also replicating this model, but the target has shifted to Bitcoin: aiming for an annualized return of 1-5%+ through staking and strategies.
The difference is that it does not make money for users, but allows users to take away this portion of the profit themselves. This means Lombard not only replicates the cash flow logic of Tether/Circle but also fills the gap of user value sharing in the spirit of Web3.
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Investment Perspective
If the market capitalization of Tether at 1.7 billion USD in 2018 was a hundredfold opportunity, then Lombard in 2025 may be at a similar starting point. Tether allows USD to flow on the chain, while Lombard aims to make BTC not just digital gold, but a productive asset that can generate yield, circulate, and be used as collateral in capital markets.
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Summary
The comparison between the two reveals a clear conclusion:
※ Same model: Issue assets and capture profits ※ Different paradigms: Tether/Circle represents Web2, Lombard represents Web3
Investing in $BARD is like betting on a dividend-type Tether/Circle, only the object has changed to Bitcoin. This is not only a continuation of the business model but could also be the starting point for Bitcoin's capital market. Is it possible that in the future it will be tokenized, and listed companies will buy it as a reserve? This is not out of the question 🤔
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Will Lombard be the next king of BTCFi cash flow?
In the crypto world, USDT / USDC defines the starting point of stablecoins. In the Bitcoin capital market, Lombard is likely to follow a similar path. However, many people tend to classify Lombard as an LST protocol, but its essence is closer to that of an issuer.
▰▰▰▰▰
Similarity of business models
The logic of Lombard is almost identical to that of Tether/Circle:
※ Tether/USDC: Users deposit US dollars → Issue USDT/USDC → Invest the underlying US dollars in US Treasury bonds to earn interest.
※ Lombard: Users deposit BTC → Issue LBTC → Invest BTC into Babylon, Vault, Basis-trade strategies to earn interest.
▰▰▰▰▰
Key differences
※ Tether/Circle: The profits belong to the company, and users only have the right to use.
※ Lombard: The profits mainly belong to the users, and the protocol only takes a small fee.
This seems like a detail, but it is the fundamental difference between Web2 and Web3. The former is a platform revenue logic, while the latter is a protocol revenue logic.
▰▰▰▰▰
Why is it important?
Today, Tether/Circle, relying on a 3-5% yield from U.S. Treasury bonds, has become the king of cash flow in the crypto market with annual profits measured in billions of dollars. Lombard is also replicating this model, but the target has shifted to Bitcoin: aiming for an annualized return of 1-5%+ through staking and strategies.
The difference is that it does not make money for users, but allows users to take away this portion of the profit themselves. This means Lombard not only replicates the cash flow logic of Tether/Circle but also fills the gap of user value sharing in the spirit of Web3.
▰▰▰▰▰
Investment Perspective
If the market capitalization of Tether at 1.7 billion USD in 2018 was a hundredfold opportunity, then Lombard in 2025 may be at a similar starting point. Tether allows USD to flow on the chain, while Lombard aims to make BTC not just digital gold, but a productive asset that can generate yield, circulate, and be used as collateral in capital markets.
▰▰▰▰▰
Summary
The comparison between the two reveals a clear conclusion:
※ Same model: Issue assets and capture profits
※ Different paradigms: Tether/Circle represents Web2, Lombard represents Web3
Investing in $BARD is like betting on a dividend-type Tether/Circle, only the object has changed to Bitcoin. This is not only a continuation of the business model but could also be the starting point for Bitcoin's capital market. Is it possible that in the future it will be tokenized, and listed companies will buy it as a reserve? This is not out of the question 🤔
#KaitoYap @KaitoAI @JacobPPhillips @Lombard_Finance #Yap