Lorenzo Protocol is designed as a Bitcoin liquidity and yield layer for DeFi. Users bring in BTC (or BTC-derivatives like wBTC), which the protocol converts into yield-bearing representations (such as stBTC or similar synthetic assets) so that otherwise “idle” Bitcoin can earn yield in DeFi instead of just sitting in cold storage. The protocol then routes this liquidity into partner protocols—lending markets, DEXs, restaking systems, and yield strategies—aiming to maximize returns while managing risk through diversification and governance controls.
The BANK token underpins this system as Lorenzo’s governance and incentive token. Holders can lock BANK (often in a vote-escrow / veBANK style) to steer emissions, direct liquidity incentives, and participate in key decisions about where and how the protocol deploys its Bitcoin liquidity. BANK rewards are also used to incentivize early adopters, liquidity providers, and participants in various yield products. Because Lorenzo’s value proposition is tightly tied to the growth of Bitcoin DeFi overall, BANK’s long-term relevance depends on how successfully Lorenzo becomes a core routing layer for BTC across chains, and how much real BTC liquidity it attracts and keeps active in its ecosystem.