RIADeFiPublished by Ketju Research
The Ledger · Economic change

Lombard moves LBTC yield to a Bitwise-managed covered-call strategy

The Ledger · · Ketju Research

ExecutedMixed evidence

Developing. Some claims here are not yet confirmed; they are listed apart from the confirmed facts. A new version replaces this one when the primary evidence changes.

Affects: Lombard BTC.b (asset)

What happened

Lombard changed LBTC's yield source from Bitcoin staking to an off-chain covered-call strategy managed by Bitwise, with a staged deployment beginning in the week of August 17.

What changed

Up to 60% of LBTC backing may enter an actively managed derivatives mandate held through qualified custodians, adding custodian, counterparty, options, and manager dependencies while targeting 2.5% net APY in bitcoin terms.

What did not change

Lombard says the LBTC token contract, mint and redeem logic, RedStone price feed, Chainlink CCIP bridge, proof-of-reserve attestations, and existing integrations were unchanged. The source does not establish a change to BTC.b's own mechanics.

Confirmed

  • The announced active-allocation cap is 60% of LBTC backing.
  • Lombard identified Anchorage Digital Bank and Kraken Institutional as custodians for the active allocation.
  • Bitwise has trading authority but, according to Lombard, cannot withdraw, transfer, or rehypothecate the assets.
  • The transition began with a planned $10 million pilot and gradual scaling.
  • The 2.5% net APY is a target, not a guarantee.

Still open

  • The actual active allocation and realized yield on each date after launch.
  • Independent verification of the stated tri-party, bankruptcy-remoteness, and no-rehypothecation protections.
  • Loss-allocation mechanics across strategy losses, any insurance fund, and LBTC holders.
  • Whether and how the Lombard BTC.b product shares the changed LBTC strategy or custody structure.

What it means for an advisor

  • Review the Lombard memo's custody, counterparty, derivatives, liquidity-buffer, and loss-allocation analysis.
  • Do not apply LBTC's targeted yield or new structure to BTC.b without product-specific evidence.
  • Treat the strategy's historical performance as non-guaranteed and not equivalent to LBTC performance.

Previous interpretation

The existing Lombard assessment predates the move from staking-derived yield to an institutionally managed covered-call strategy.

Sources

  1. LBTC Moves to Institutional Yield: Targeting 2.5% Net APY, Strategy Managed by Bitwise · Lombard Finance · · effective

Version 1, published . We check this event again on . Educational research, not investment advice.