I have seen many people react similarly when they first hear about Lorenzo's chain architecture: "If you're doing BTCFi, why not just create a purer monolithic chain?" This question is good because it directly hits at Lorenzo's true ambition: what he wants to create is not just a yield chain that only he can use, but a layer that integrates BTC native staking, EVM funds, Cosmos modular capabilities, and multi-chain strategy scheduling into a single machine known as the "BTC Liquidity Financial Layer." Backtracking from this goal, the Cosmos application chain + Ethermint is almost an extremely engineered and very realistic optimal solution.
First, let’s lay out the 'three foundational pieces' that Lorenzo officially provided, and you'll understand why it doesn't want to go down the 'reinventing the wheel with a monolithic chain' route. Its architectural core includes an application chain built using Cosmos Ethermint, a relayer system for bi-directional state synchronization with BTC L1, and a mechanism responsible for issuing and settling BTC-related LRT/LST. In other words, Lorenzo's chain is not meant for storytelling; it is the operating system for the issuance, settlement, risk control, and governance of assets like stBTC, LPT, YAT, enzoBTC, etc. This 'asset-centric financial chain' inherently requires a highly customizable modular base, rather than a monolithic chain that you have to stack from consensus, virtual machines, to governance all over again.
The greatest value of the Cosmos application chain concept can be summed up in four words: application first. You don't first decide 'I want to create a general-purpose public chain,' and then think 'what applications can run on it,' but rather the opposite: I have a clear business—BTC liquidity and verifiable yield—so I build an appchain optimized specifically for that business. The modularity of the Cosmos SDK allows you to assemble and modify features as needed, especially when it comes to financial-grade components like BTC staking proofs, cross-chain asset settlement, risk control parameters, and governance logic; you can make them chain-level modules rather than cramming all the complexity into application contracts. The Ethermint official documentation also emphasizes that the significance of introducing the EVM module into the Cosmos chain lies in 'chain-level controllability and customizability,' enabling more granular network and functionality configuration, which can be combined with self-developed or third-party modules.
This leads to the second key reason: Ethermint allows EVM compatibility to no longer be bound by the 'historical baggage of general-purpose chains.' Lorenzo does not need to reinvent a smart contract ecosystem nor force developers to learn a completely new language or tool stack. Ethermint allows this Cosmos application chain to directly run Solidity and familiar development tools from the Ethereum ecosystem, thus bringing the most mature asset standards, contract auditing experiences, and developer supply from the DeFi world straight into its financial core layer. You can think of this as a 'language unification for the financial layer': using Cosmos's modularity and governance upgrade capabilities for chain-level engineering at the bottom layer, while leveraging the vast developer and protocol ecosystem of EVM for strategic and combinatorial innovation at the upper layer.
The third reason is more practical: the difficulty of BTCFi has never been just 'writing a yield contract,' but rather 'bringing the state of the Bitcoin mainnet into a secure and verifiable manner.' Lorenzo chooses a separate application chain while also using relayers to achieve bi-directional synchronization between BTC L1 and the Lorenzo Chain, in order to manage 'the determinism of the BTC mainnet' and 'the programmability of the application chain' separately. The project interpretation from Binance Square also clearly mentions that Lorenzo's operational core is focused on the Ethermint appchain, connecting BTC L1 through the synchronization system, allowing the issuance and settlement of staking-related assets to become a chain-level capability. This structure is inherently more favorable for delineating risk control boundaries than 'mixing everything into a single monolithic chain': the security assumptions on the BTC side, strategy combinations on the EVM side, and liquidity scheduling on the cross-chain side can be processed, audited, and limited in layers.
Looking deeper, the Cosmos ecosystem offers a frequently overlooked but crucial implicit benefit for Lorenzo: interoperability and expansion paths are more natural. Lorenzo is not satisfied with just playing stBTC on one chain; it wants to bring the principal and yield certificates of BTC into a larger multi-chain market. An official Medium article in 2024 revealed its plan to launch an EVM-compatible Cosmos appchain and conduct closer collaboration tests with the security/validator system of Cosmos Hub. You can think of this as a 'future-oriented upgrade roadmap': when the protocol requires stronger shared security, more IBC-level interconnections, or richer cross-chain asset standards, the Cosmos toolbox will leave more room than a 'self-developed monolithic chain.'
Therefore, the real change in rules can be summarized as follows: Lorenzo is not 'recreating a chain' but 'using an appchain designed for finance to condense complexity to the chain level,' and then leveraging Ethermint to seamlessly bring in the liquidity and developer dividends from the EVM world. For users, this means that what you will see in the future is not an isolated BTCFi platform, but a base more like a 'financial operating system': you only need to understand that stBTC/LPT are principal certificates, YAT is a yield entitlement, and enzoBTC is a more standardized multi-chain BTC cash form; the remaining complexity of cross-chain synchronization, strategy scheduling, and product packaging should theoretically be handled by this architecture.
I will conclude with a more relatable metaphor. A monolithic chain is like starting from scratch to open a restaurant, beginning with mining, steelmaking, and pot-making; the Cosmos application chain is more like directly taking a mature kitchen system and then modifying the workflow according to your cuisine; Ethermint is akin to effortlessly bringing in the world's most mature set of kitchen tools and chef training systems. Lorenzo's cuisine is very clear: to transform BTC from an 'asset relying solely on price fluctuations' into a 'yield asset that can be split, combined, and managed for duration and risk.' To achieve this dish, it will certainly choose the most suitable architecture for creating a 'pluggable financial kitchen' rather than creating an isolated monolithic castle just for show.
If you are a new reader, I suggest you use a very simple verification action to reinforce the conclusions of this article: the next time you see a product introduction from Lorenzo, don't just focus on the yield numbers; first ask yourself three questions—Is this being done by a chain-level module or a contract? What states does it need to synchronize with BTC L1? Why does it need EVM compatibility to function? When you can break down a product using these three questions, you'll realize that the path of Cosmos Ethermint is not just a 'technical preference' but a 'financial engineering necessity.'
