Key Results

The Challenge

Lombard built LBTC to solve a fundamental problem in Bitcoin DeFi: enabling BTC to move cross-chain and generate yield without fragmenting liquidity or introducing centralized custody risk.

LBTC is a yield-bearing, cross-chain compatible asset fully backed 1:1 by Bitcoin. Holders earn native yield through Babylon staking while retaining the ability to use their BTC across DeFi protocols for lending, borrowing, and trading.

But bringing Bitcoin-backed assets into DeFi introduced a critical infrastructure requirement that no existing oracle could provide: real-time cryptographic proof that reserves match the circulating supply.

The Core Problem: Trust Without Verification

For LBTC to function safely as collateral in lending markets, users and protocols needed continuous, verifiable proof that every LBTC token in circulation was backed by actual Bitcoin locked in Babylon. Without this:

• Lending protocols couldn’t safely accept LBTC as collateral – any uncertainty about backing ratios creates liquidation risk
• Users had no way to verify reserves in real time – manual attestations or periodic audits introduce lag and trust assumptions
• Cross-chain movement fragmented transparency – LBTC exists across multiple EVM chains, requiring synchronized reserve verification everywhere simultaneously

Traditional audit models rely on periodic snapshots. In fast-moving DeFi markets where collateral ratios determine liquidations and borrowing limits, stale data is a structural risk.

Lombard needed an oracle that could:

1. Monitor Bitcoin addresses holding reserves.
2. Verify ownership cryptographically.
3. Monitor the amount of outstanding LBTC on all blockchains where it is natively launched.
4. Calculate precise reserve ratios.
5. Publish this data onchain across all supported chains.
6. Do all of this continuously, not periodically.

! No existing oracle provided real-time Proof of Reserves for a Bitcoin LST at this level of frequency and cross-chain coverage.

The Solution

! RedStone built the first real-time Proof of Reserves oracle specifically designed for Bitcoin liquid staking tokens.

How It Works

The RedStone Proof of Reserves feed for LBTC operates on a real-time verification cycle across all supported EVM chains. The system:

1. Monitors Bitcoin addresses holding reserves locked in Babylon by Lombard
2. Verifies ownership cryptographically using attestation methods
3. Calculates the precise reserve ratio (BTC locked vs. LBTC circulating supply)
4. Publishes this data onchain as a continuously updated feed

This architecture ensures that any protocol integrating LBTC can verify backing in real time rather than relying on periodic attestations that may be days or weeks out of date.

Impact & Business Outcomes

System Performance

The real-time verification frequency provides continuous monitoring without introducing excessive gas costs. LBTC reserve data remains current enough for DeFi protocols to safely use it for collateral valuation and liquidation logic.

Security & Data Integrity

RedStone’s Proof of Reserves architecture provides several security guarantees:

• Real-time accuracy – real-time updates ensure collateral ratios reflect current backing, reducing liquidation risk from stale data
• Cross-chain consistency – Reserve verification is synchronized across all EVM chains where LBTC exists, preventing fragmentation
• Permissionless transparency – Any user or protocol can verify LBTC backing without trusting Lombard to manually update attestations

This eliminated the need for centralized, trust-based reserve reporting and turned backing verification into a permissionless, programmatic function, empowering protocols and users alike.

Business & Network Impact

Measurable Ecosystem Growth

• $50M+ TVL secured across Morpho markets alone, with LBTC becoming one of the most active BTC derivative capital pools on the platform
• 80+ DeFi protocol integrations enabled by verifiable reserve data, allowing LBTC to function as collateral across lending markets, perp DEXs, and automated yield vaults
• Trusted by top-tier curators: Gauntlet, Yearn, SteakhouseFi, kpk, and MEV Capital all integrated LBTC, demonstrating institutional confidence in RedStone’s PoR infrastructure

Ecosystem Efficiency & Developer Experience

• Permissionless composability – Any protocol can consume LBTC reserve data without building custom verification logic or relying on manual attestations, dramatically reducing integration friction
• Cross-chain liquidity unlocked – Real-time PoR verification across all EVM chains enabled LBTC to move between networks without fragmenting transparency or trust assumptions
• Risk reduction at scale – Lending protocols can safely accept LBTC as collateral with confidence in real-time backing ratios, eliminating the lag and uncertainty inherent in periodic audit models

Market Structure Innovation

• First Bitcoin LST with continuous PoR – The real-time verification cycle set a new transparency standard for yield-bearing Bitcoin assets, raising the bar for what DeFi protocols expect from reserve-backed tokens
• Institutional-grade transparency onchain – RedStone’s cryptographic verification turned reserve attestation from a trust-based, centralized process into a permissionless, programmatic function that any participant can inspect
• Template for Bitcoin DeFi growth – The integration demonstrated how proper oracle infrastructure enables Bitcoin-backed assets to scale safely across DeFi without introducing centralized custody risk or manual verification bottlenecks

Summary – Why This Matters?

This integration established a new transparency standard for Bitcoin-backed assets in DeFi. By solving reserve verification at the oracle layer, RedStone enabled LBTC to scale across 70+ protocols without each integration needing to build custom attestation logic. Real-time PoR feeds transformed Bitcoin LST verification from a centralized, trust-based process into a permissionless infrastructure that any protocol can consume.

If you’re building with Bitcoin-backed assets, tokenized reserves, or any asset that requires proof of backing, this case study shows how oracle-layer verification eliminates integration friction, reduces systemic risk, and enables institutional-grade onchain transparency. Proof of Reserves should be based on infrastructure, not on trust assumptions.

TL;DR

• Lombard built LBTC, a yield-bearing Bitcoin LST fully backed 1:1 by BTC locked in Babylon staking, enabling Bitcoin holders to earn yield while maintaining cross-chain DeFi access.
• The critical barrier: DeFi protocols needed real-time cryptographic proof that reserves matched circulating supply to safely accept LBTC as collateral, but no oracle provided continuous Bitcoin LST verification.
• RedStone built the first real-time Proof of Reserves oracle for LBTC, verifying BTC reserves in real time across all supported EVM chains through cryptographic monitoring and automated reserve ratio calculation.
• The result: LBTC secured $50M+ TVL across Morpho markets alone and integrated with 70+ DeFi protocols, with reserve verification becoming permissionless and programmatic rather than trust-based.
• The unlock: Top-tier DeFi curators, including Gauntlet, Yearn, and SteakhouseFi, integrated LBTC with confidence, demonstrating how real-time PoR infrastructure turns Bitcoin-backed assets into safe, composable DeFi primitives.

RedStone is a leading blockchain oracle provider, delivering fast, cross-chain data feeds to power DeFi protocols and institutional applications. As the oracle of choice for real-world asset tokenization, including BlackRock’s BUIDL fund and European treasury assets via Spiko, RedStone bridges traditional finance with on-chain infrastructure. RedStone offers the industry standard for secure pricing and quality support, serving as the market leader for emerging ecosystems and institutional use cases.

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Lombard is building onchain Bitcoin Capital Markets to unlock the full potential of the most important asset of our generation. Founded in 2024, Lombard pioneered Bitcoin’s integration into DeFi with LBTC, the leading liquid-staked token secured by a consortium of top institutions. Today, Lombard is building full-stack infrastructure to accelerate onchain BTC adoption by holders, protocols, and platforms. Lombard is built and backed by digital asset leaders, including top DeFi protocols, institutions, and exchanges.

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