Bitcoin’s $2 Billion DeFi Breakthrough Is Here — And This Startup Is Leading the Charge
Staff Writer • 2025-03-28
Lombard Finance is bringing Bitcoin into the world of permissionless finance, and its founder thinks we’re just getting started. In the world of crypto, Ethereum has long been the playground for innovation while Bitcoin sat quietly on the sidelines—valuable, but largely inert. Now, one startup is flipping the script. Lombard Finance, a rising DeFi infrastructure company, has quietly onboarded more than 22,000 Bitcoin (roughly $2 billion in value) into the decentralized finance ecosystem through a clever mix of liquid staking and trust-minimized design. And according to founder Jacob Phillips, the Bitcoin DeFi revolution is only just beginning. From Dorm Debates to DeFi Dominance Phillips’ journey into crypto wasn’t exactly planned. What began as political debates with his dad turned into a research-heavy deep dive into finance, startups, and ultimately, blockchain. While pitching VCs in 2018 with generic crypto buzzwords, he found himself accidentally staffed on a fund launching a crypto division. That twist of fate pushed him into deeper waters—working across crypto hedge funds, eventually landing at Polychain Capital, one of the most respected firms in the space. But sitting on the sidelines wasn't enough. “I got tired of just investing in cool stuff,” Phillips said on the Stonks Go Moon Podcast. “I wanted to build something myself.” The $2B Question: How Do You Give Bitcoin Utility? Bitcoin, while the largest and most secure crypto asset, isn’t known for its usability in DeFi. Unlike Ethereum, it doesn’t natively support smart contracts—making it clunky for on-chain finance. Lombard Finance’s solution? Bring Bitcoin into DeFi without compromising on decentralization or liquidity. Their flagship product, LBTC, is a liquid staking token backed by real Bitcoin. Users can stake BTC and receive a liquid token they can then use throughout DeFi—borrow against it, trade it, or use it as collateral. In short, it unlocks Bitcoin’s potential as a productive asset. To safeguard that value, Lombard created a security primitive by partnering with top-tier institutions like OKX, Galaxy, and Wintermute, rather than relying on centralized custody or a single multisig setup. Bitcoin Maxis, Beware—But Also, You’re Not the Target Phillips doesn’t mince words: winning over hardcore Bitcoin purists isn’t part of the plan. “There’s $2 trillion in Bitcoin out there,” he said. “Not all of it is held by the maximalists. Our early users are the same ETH whales already familiar with DeFi.” By targeting power users already comfortable with staking and rehypothecation, Lombard sidestepped the ideological resistance and focused on building something that worked—quickly. That speed helped Lombard gain momentum, especially as a more crypto-friendly political wave hit the U.S. Trustless Tech or Bust While much of crypto is still figuring out where it sits on the spectrum between trustless and efficient, Phillips is firm on where he thinks the world is heading. “Fully trustless systems will win out in the long run,” he said. “Right now, it may not be practical for every use case—but over time, it will become the standard. That’s the future we’re building toward.” That belief is baked into Lombard’s DNA. The startup’s infrastructure is designed to eventually evolve into a fully decentralized system—bringing trustless Bitcoin to the heart of DeFi. What’s Next for Bitcoin in DeFi? Phillips laid out two big goals for the next six months: Onboard more Bitcoin. Make BTC a real DeFi-native asset. That means not just using Bitcoin as collateral, but also enabling on-chain trading, stablecoin borrowing, and integration with DeFi giants like MakerDAO, Uniswap, and Aave. “There’s a convergence happening between centralized exchange liquidity and DeFi,” he said. “The line is starting to blur. When trading Bitcoin on-chain feels the same as doing it on Coinbase, we’ve won.” Crypto’s Most Underrated Product? Wallets When asked what crypto product is most undervalued, Phillips didn’t hesitate: wallets and aggregators. “Everyone wanted to invest in the protocol layer,” he said. “But the real work—the user onboarding—happens at the interface. That’s where the next wave of innovation is coming.” The Bottom Line Lombard Finance isn’t trying to make Bitcoin sexy—it’s trying to make it useful. And in a market craving functionality over fanfare, that might be exactly what gives it the edge. As the crypto world slowly transitions from speculative mania to infrastructure maturity, Lombard’s bet is clear: Bitcoin doesn’t need to change. The rails around it do.
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