Lombard has launched a dedicated Spoke within V4’s hub-and-spoke architecture. Meaning LBTC can be used as collateral to borrow from a core liquidity hub, with new collateral rules, risk parameters, and liquidation logic for users borrowing against LBTC collateral.

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A First Worth Celebrating

When LBTC was listed on Aave in January 2025, it made history: the first and only yield-bearing Bitcoin ever to land on the world's largest lending protocol. No other yield-bearing Bitcoin has followed.

Since then, the market has spoken. Consistently, $200–300 million in LBTC has been deployed on Aave as collateral, making it one of the most popular destinations for LBTC in all of DeFi, month after month. Bitcoin holders found something they wanted: the ability to use their BTC as collateral, while continuing to earn Bitcoin-on-Bitcoin yield.

With V4, it gets significantly better.

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What Aave V4 Actually Is Aave is the largest decentralized finance protocol with $47 billion in net deposits. Aave V4 is the result of two and a half years of research and development. At the core of Aave V4 is a hub-and-spoke architecture that allows distinct financial markets to operate with their own parameters and asset types while remaining connected through a shared liquidity and risk framework. This design allows risk to be priced more precisely at the collateral level, aligning borrowing costs with underlying exposure and improving capital efficiency.

The original Aave model was a single unified lending pool. Pioneering when it launched, but it created a structural tension over time: every new asset and market type added complexity and risk to the same shared system. Customization meant fragmentation. Innovation meant exposure.

V4 resolves this with a hub-and-spoke architecture. A central liquidity hub concentrates capital. Individual spokes connect to it with their own collateral rules, risk parameters, and liquidation logic — each operating as a distinct market while drawing on shared liquidity from day one. Partners can launch specialised lending markets on top of Aave's existing liquidity without bootstrapping their own deposits.

V4 launches on Ethereum mainnet with three Hubs and ten Spokes. It's accessed through Aave Pro — a new interface at Aave.com built specifically for V4's architecture.

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What It Means for LBTC

Within V4's architecture, Lombard has a dedicated spoke — its own market with parameters built for a Bitcoin-native asset. The spoke currently includes LBTC, with a view to BTC.b being added in the near term.

Today, LBTC holders earn 0.38% APY denominated in Bitcoin, staking yield accruing directly in BTC terms.

There are two core use cases:

1. LBTC Looping: Borrowing BTC wrappers against LBTC, and acquiring more LBTC - effectively leveraging the LBTC position and Bitcoin-on-Bitcoin yield by capturing the spread between WBTC or cbBTC borrow cost and LBTC APY.
2. Borrowing Stables: Borrowing against a yield-bearing LBTC collateral. Using LBTC as collateral unlocks additional capital efficiency for borrowers, as their collateral is not just sitting idle but accumulates Bitcoin yield in the meantime. In simple terms, LBTC yield is subsidising the borrowing costs for the user.

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Where This Goes Next

V4's architecture doesn't just improve the current experience — it expands what's possible for Bitcoin capital markets.

The hub-and-spoke design creates room for markets genuinely fit for purpose: institutional custody configurations, fixed-rate lending, structured credit products, non-standard collateral types. The design surface for Bitcoin-native financial markets just got dramatically larger.

Bitcoin's market cap is approaching $1.3 trillion. The vast majority of it still sits idle. LBTC exists to change that — turning Bitcoin from a store of value into a productive onchain asset, without compromising what makes it Bitcoin.

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Get Started

LBTC is available now on Aave V4. Head to Aave.com, navigate to Aave Pro, connect your wallet, and find the LBTC market.

Your Bitcoin should be working.