EigenLayer Partners with Lombard Finance to Bring Bitcoin to Restaking

EigenLayer and Lombard Finance

EigenLayer ($EIGEN) is a pioneering restaking protocol on Ethereum that allows users to “repurpose” staked assets (such as ETH) to secure Actively Validated Services (AVS), such as blockchain bridges, oracles, layer-2s, or data networks. With over $7 billion in restaked assets, EigenLayer has become one of the largest DeFi applications, notably with its recently implemented “slashing” mechanism for enhanced security.

Lombard Finance ($LBTC) is a liquid staking platform for Bitcoin, allowing users to stake BTC on the Babylon protocol to generate LBTC tokens. LBTC is a liquid staking token that can be used in DeFi applications to generate additional yields, currently around 3% per annum. Lombard has integrated LBTC on multiple blockchains, including Sui, and is supported by major exchanges such as Binance and Bybit.

This partnership marks a major milestone, as Bitcoin – which is primarily seen as a “store of value” – is brought into a restaking ecosystem for the first time, opening up the possibility of dual returns from both Babylon and EigenLayer.

How LBTC integration into EigenLayer works

According to the announcement, Bitcoin users can stake BTC on the Babylon protocol to receive LBTC, then restake LBTC on EigenLayer to participate in securing AVSs and earn additional rewards. The mechanism works as follows:

• Staking on Babylon: Users deposit BTC into the Babylon protocol to stake, receiving LBTC – a token representing the staked BTC, keeping liquidity.

• Restaking on EigenLayer: LBTC is included in the EigenLayer ecosystem, where it is used to secure AVSs. Users earn yield from both Babylon (base staking rewards) and EigenLayer (restaking rewards).

• Security and Liquidity: LBTC is integrated with EigenLayer's Active Validation Service (AVS) mechanism, using restaked validators to ensure accuracy and security. At the same time, LBTC remains liquid, allowing users to trade or use in other DeFi applications.

This integration not only provides double yield but also leverages Ethereum's security to strengthen trust in applications using LBTC.

Conclusion and outlook

The partnership between EigenLayer and Lombard Finance to bring Bitcoin into the restaking ecosystem is a major step forward in expanding Bitcoin’s utility and solidifying EigenLayer’s role in DeFi. With the ability to earn double yields, maintain liquidity, and leverage Ethereum’s security, LBTC promises to attract a wide range of users and investors. However, market, technical, and competitive risks need to be closely monitored.

In the future, this event could pave the way for similar integrations, bringing other major assets into the restaking ecosystem and fostering the development of multi-chain DeFi. With Lombard and EigenLayer committing to joint research, the crypto community can look forward to further innovations in shaping blockchain infrastructure.