Two new vaults, curated by Gauntlet and Re7, have launched to offer risk-adjusted BTC-denominated yield generated from over-collateralized lending in a permissionless and secure environment. MEV Capital, a long-time Vault Curator, will launch a vault with LBTC in the coming weeks.

Morpho is a permissionless and non-custodial lending protocol where interest is earned on over-collateralized lending, and digital assets can be borrowed using immutable infrastructure. Morpho enables Vault Curators like Re7, Gauntlet, and MEV Capital to deploy vaults, utilizing their proprietary risk methodologies.

Curators aim to optimize risk-adjusted yield and growth by actively managing capital efficiency, rate curves (and utilization), and other risk parameters. Morpho works together with Vault Curators to offer additional incentives to the top-performing Curators and Vaults.

These new vaults, introduced in collaboration with Lombard, seed new borrow markets for LBTC/wBTC. Borrowers can deposit LBTC as collateral to borrow wBTC liquidity from the vault. The interest paid by borrowers to the vault is claimable by suppliers at any time.

Currently, over $2 billion is deposited on Morpho, indicative of the demand for capital-efficient borrowing, leveraged yield opportunities, and access to higher APY and incentives.

Why connecting LBTC to Morpho matters?

For the Morpho ecosystem, it means having a new blue-chip collateral that brings substantial net-new liquidity and drives utilization rates of the BTC-denominated liquidity. For DeFi users on the supply side, it opens up previously scarce yield opportunities on Bitcoin, allowing them to earn low-risk returns through overcollateralized lending. On the demand side, users can use their LBTC holdings as collateral to take advantage of opportunities in the market, and make use of leverage in a permissionless and secure environment.

The integration benefits not only individual users but the entire ecosystem by fostering an efficient market where capital flows to areas of highest demand, driving innovation and creating sustainable market dynamics over time.

How to Participate

Mint LBTC from Lombard

• Visit the Lombard Dashboard to stake your BTC and mint LBTC: https://www.lombard.finance/app/
• Alternatively, swap ERC-20 tokens like wBTC for LBTC: https://www.lombard.finance/app/swap/

Borrow wBTC using LBTC as collateral

• Visit Morpho: https://app.morpho.org/?network=mainnet

Incentives

Users who supply the Re7, Gauntlet and soon MEV Capital LBTC/wBTC vaults will be eligible for Morpho rewards and Lombard Lux.

MORPHO rewards to users who supply wBTC to a Morpho Vault:

• Value (in $) supplied to Morpho vaults.
• Duration of supply in Morpho vaults.

Lombard Lux to both wBTC borrowers and suppliers:

• wBTC borrowers ⇒ 3x multiple
• wBTC suppliers ⇒ 2x multiple

Lombard Lux will only be issued when LBTC is the collateral asset. MORPHO rewards and Lombard Lux accrue outside of the vaults and need to be claimed from Morpho and Lombard separately. Lombard Lux are displayed on the 'DeFi' tab within the Lombard WebApp https://www.lombard.finance/app/defi/. Simply connect your wallet and navigate to the designated section to view your accruals in real-time.

Lombard Lux are not, and may never convert to, accrue to, be used as basis to calculate, or become any tokens or other digital assets. The Lombard Protocol restricts access to users in certain jurisdictions, including the United States. For a full list of restricted parties, please visit our Terms of Service.