What Is Lombard Finance? LBTC, BTC.b and How the Bitcoin Yield Works

Lombard's Global Terms of Service, effective August 12, 2026, name LF Operations Inc., a Panama corporation, as the contracting company. The terms are governed by Cayman Islands law. Disputes go to arbitration seated in George Town, Cayman Islands ¹. A separate Lombard Finance Foundation holds 20% of the BARD token supply ⁹. The terms let Lombard require identity and source-of-funds checks if a compliance issue arises ¹.

• LBTC. Yield-bearing Bitcoin. You mint it directly on Ethereum, Base, BNB Chain, Avalanche, Etherlink, MegaETH, Monad, Stable, Solana and Sui ⁸.
• BTC.b. A 1:1 Bitcoin token with no yield. Ava Labs created it in 2022 for Avalanche. Lombard acquired its infrastructure in October 2025, when about $550 million was in circulation. Token addresses did not change ⁷.
• Bitcoin Smart Accounts, Bitcoin Earn and an SDK for apps and AI agents. These are listed in the docs and fall outside this profile.
• BARD. A token with a fixed supply of 1 billion. Its staking program, which helped secure cross-chain transfers, was retired in 2026. New staking closed September 17, 2026, and rewards ended after October 1 ⁹.

1. Deposit BTC to the unique address the Lombard app gives you. The minimum is about 0.0002 BTC ².
2. Wait about 40 to 60 minutes for six Bitcoin confirmations. LBTC is then minted on the chain you chose ².
3. Hold or use it. LBTC does not rebase. Your token count stays the same, but each token is worth more BTC as yield accrues ².
4. Redeem to a native SegWit (bc1q) or Taproot (bc1p) Bitcoin address. Legacy addresses are not supported. Redemptions can take up to 10 days and cannot be sped up. The faster exit is to sell LBTC on the market, possibly below redemption value ².

Lombard announced on August 13, 2026 that it was replacing Babylon-based Bitcoin staking yield with a covered-call strategy. The docs say Bitcoin staking "failed to develop" as a market ⁵¹⁰. The new strategy started with a $10 million pilot and was meant to scale to 50–60% of backing in September ¹⁰.

The manager is Bitwise Investment Manager, LLC, which the docs describe as an SEC-registered investment adviser ³. It sells call options on Bitcoin, about 1.5 to 2 standard deviations above the spot price, and collects premiums in cash. No more than 60% of LBTC's backing goes into the strategy. The rest earns nothing and funds redemptions ³. The rules bar leverage, puts, naked shorts and lending out the Bitcoin ³.

What the 2.5% target means. It is a net target in BTC terms, after Lombard's 20% fee. It is not guaranteed. Yield falls in quiet markets, and a sharp Bitcoin rally can cause temporary mark-to-market losses ²³.

You also pay the Bitcoin network fee on your deposit and gas on the destination chain.

LBTC's Bitcoin sits in two places ⁵:

• Active allocation (up to 60%): in segregated, Lombard-owned accounts at Anchorage Digital Bank and Kraken Institutional. Bitwise can trade but cannot withdraw ²⁵.
• Passive allocation (40–50%): under the Security Consortium, a group of 14 institutions including OKX, Galaxy, DCG, Wintermute, Kraken and Figment. Critical actions need 10 of 14 signatures. Keys are held in CubeSigner hardware modules ⁶.

Lombard reports 10 smart-contract audits by six firms, including OpenZeppelin, Halborn and Veridise. It runs an Immunefi bug bounty of up to $500,000 ⁶. Chainlink Proof of Reserve feeds check the Bitcoin backing every 10 minutes ⁶. LBTC is therefore not trustless. Holders rely on the consortium, the custodians and Bitwise's mandate. A proof of reserve is not a full solvency audit.

The Global Terms list US and UK persons as prohibited users. They also exclude people in sanctioned places including Russia, Iran, North Korea and parts of Ukraine. Users must be 18 or older ¹. The LBTC docs state that the yield strategy, including direct minting and redemption, is not available to US or UK persons ².

On September 16, 2026, Lombard disabled new minting and redemption on TAC, Sonic, Katana, Berachain and Starknet. Holders on the first four must bridge balances to Ethereum by December 10, 2026. Starknet has no deadline ⁸. Unwind any DeFi positions first, and keep gas on the source chain ⁸.