Recently, while browsing the community, I found Lorenzo frequently appearing in various formal channels: Binance Academy, CMC, Atomic Wallet successively publishing long articles to break it down, bringing BANK directly into the narrative of 'institutional-grade on-chain asset management'; meanwhile, the USD1+ fund has moved from the testnet to the BNB Chain mainnet, and news of its launch has been flooding major exchange information channels. Additionally, the official announcement on X about putting out 1,000,000 BANK for the Binance Alpha Airdrop event has kept this old DeFi player glued to the chair, making me take another good look at what upgrades this protocol is really working on.
If I were to summarize Lorenzo now in one sentence, I would understand it as 'the infrastructure that unifies CeFi quant, RWA yield, and DeFi liquidity into on-chain funds and vaults'. One end connects to BTC and stablecoins, while the other connects to various active strategies. The core of the protocol is a financial abstraction layer called Financial Abstraction Layer (FAL), which is responsible for breaking down various strategies into modules, unifying capital routing, net value calculation, and yield distribution. Then, through a tokenized fund shell like On-Chain Traded Fund (OTF), it conceals complex execution details in the background, leaving users with a 'share token' that can be traded on-chain and accessed in DeFi. For someone like me, who doesn't want to monitor the markets every day yet is unwilling to settle for just risk-free rates, this represents an additional channel: I'm not picking 'which pool is better', but rather 'which strategy fund is more suitable for me' on-chain.
The strongest presence currently is this USD1+ OTF fund. In simple terms, it is an on-chain 'money market fund + hedging strategy combination' running on the BNB Chain: part of the underlying assets are invested in tokenized government bonds and other low-risk RWA assets, part is given to CeFi quant funds for arbitrage, market neutrality, and volatility strategies, and another part is deployed in DeFi protocols for liquidity provision or yield strategies. All returns are ultimately settled in USD1 by World Liberty Financial, reflecting in the net asset value changes of USD1+. Both official sources and several exchanges mention that it is a non-heavy base yield token. A common approach for users is to deposit stablecoins and receive redeemable USD1+ or sUSD1+. The latter's quantity remains unchanged while its price gradually increases, aiming to be a 'long-term stable yield fund on-chain'—there have even been references to a 7-day annualized upper limit target in promotions. For users accustomed to money market funds and wealth management products, this product format looks much more comfortable than a '300% annualized mining pool'.
From my practical experience, what impressed me most about USD1+ is not the eye-catching 'multiple sources of yield', but rather how the entire interaction pathway is sufficiently 'clumsy and user-friendly'. I tested it with a small amount of USDT on the BNB Chain, connecting my wallet, selecting USD1+, and confirming the on-chain transaction. After that, my wallet quietly gained a sUSD1+, with almost no 'stimulation' for the first few hours—there were no significant fluctuations in net value, nor complex yield panels flashing numbers. After some time, refreshing the page showed a slight increase in unit price while the shares remained unchanged—this experience felt more like viewing a bond fund on a traditional brokerage app rather than trying to extract a high APY on-chain. For someone like me who often brings friends into the space, this product format is relatively easy to explain: you can tell them, 'it's an on-chain money market fund made up of RWA + quant + DeFi', without needing to explain what LP is or what impermanent loss means.
However, Lorenzo's story is definitely not just about stablecoins; it originally stood on the BTC liquidity layer. I revisited the technical documentation for stBTC and found that this design is very friendly to veteran Bitcoin bulls: when users stake native BTC through a designated path into a PoS ecosystem like Babylon, Lorenzo will mint stBTC as the principal amount while separately issuing YAT, which represents the right to yield, effectively splitting the 'principal' and 'interest' into two tickets. stBTC is responsible for redeeming that BTC principal, while YAT continuously accumulates the yield generated by staking, and you can trade or reallocate YAT separately. External research on Lorenzo also mentions that this model of splitting principal and yield is very suitable for circular staking and leveraged staking: you can use stBTC as collateral to borrow more BTC, and then continue to stake, extending and magnifying the yield curve of a single BTC. Meanwhile, stBTC itself can access other DeFi protocols on different chains through cross-chain tools, no longer confined to spinning within a single ecosystem. For players accustomed to keeping BTC idle in cold wallets, this layer of 'moving dead assets into DeFi' infrastructure is a prerequisite for the entire narrative to stand firm.
Returning to BANK, its role in this upgrade has clearly transformed from a 'pure project token' to a 'strategy passport' within this asset management system. The official documents state it plainly: BANK is Lorenzo's native governance and utility token, with a total supply of 2.1 billion, an initial circulation ratio of about 20%, and a complete unlocking period of 60 months, with no unlocking arrangements for teams, early investors, or vaults in the first year, aiming to leave more chips for those who genuinely participate in the protocol. Holders can stake BANK to receive veBANK, which is a non-transferable governance credential weighted by lock-up time, used for voting, adjusting incentive weights, and deciding which products and vaults receive more rewards, while BANK itself will also be returned as part of the protocol's revenue to active users. Recently, what has made me feel like 'this is significant' is the official announcement on X to allocate 1 million BANK to support the Binance Alpha Airdrop, effectively tying 'product experience and governance participation' directly to the ecosystem of leading exchanges, providing an additional layer of incentive for those early participants willing to invest time in studying strategies.
From an ordinary user's perspective, if I were to summarize the benefits brought by Lorenzo's overall upgrade, I would feel it in three levels. First, the 'decision difficulty' has been significantly reduced: previously, I had to find strategies myself among CEXs, DeFi, and various quant platforms, but now it's more about choosing an OTF or vault and entrusting the choice to strategy managers with risk control and historical performance, while FAL helps with capital routing. Second, the 'asset composition' has become smoother: stablecoins can access diverse low-risk strategies through products like USD1+, while BTC enters DeFi through derivatives like stBTC, YAT, and enzoBTC, no longer forced to choose between 'safety and complacency' and 'high-risk aggressiveness'. Third, the 'depth of participation' has increased: if I just want to be a 'passive investor', I can just allocate stablecoins and BTC; if I'm willing to spend time researching, I can use BANK/veBANK to participate in governance, pushing certain strategies to gain more resources, turning my preferred direction into a real-world incentive curve. For someone who has been tinkering on-chain since 2020, this bottom-up product evolution is far more attractive than merely high APR.
Of course, I won't treat Lorenzo as a 'mindless investment', especially as it connects CeFi, RWA, and multi-chain DeFi; some risk points need to be clarified. The design of stBTC is inherently DeFi-oriented, but current custody still relies on institutions like Cobo and Ceffu, which is a typical CeDeFi model. This means users must trust that the custodians will not act maliciously and accept potential risks from cross-chain and technical modules. When FAL allocates funds to CeFi quant and RWA assets, it also faces issues like counterparty defaults, strategy failures, and liquidity exhaustion in extreme market conditions. From BANK's perspective, although the unlocking design is relatively friendly, the long time frame and large total amount mean different rhythms of sell pressure in the medium to long term, and price fluctuations are bound to be significant. For me, the only reliable approach remains that old adage: understand the product logic, accept the worst-case scenario, decide on position size, and treat it as part of a portfolio rather than the whole.
If you currently have some BTC and stablecoins lying idle on an exchange or cold wallet, and you don't want to invest all your energy in monitoring the markets, I would suggest starting small, like I did, and personally walking through Lorenzo's complete path: use stablecoins to experience USD1+ OTF and see if its net value and yield rhythm meet your psychological expectations; then try a small amount of BTC with the combination of stBTC and YAT, to feel the liquidity changes after splitting the principal and yield; if you find yourself interested in the logic behind the strategy, then consider studying BANK/veBANK to upgrade from being a 'simple user' to a 'participant and decision-maker'. Regardless of whether you ultimately want to heavily invest in Lorenzo, this new experiment around BTC liquidity and on-chain asset management itself deserves a bookmark to occasionally check its evolutionary trajectory. Lastly, a customary reminder: the above are my personal experiences and thoughts as a user, not investment advice; any position should still be based on your risk tolerance.
