shBTC
Yield-Bearing BTC Exposure via On-Chain Vaults
shBTC is the yield-generating component of Syntetika’s architecture—a tokenized staking position that enables BTC holders to earn institutional-grade yield through professionally managed strategies, while maintaining composability and liquidity across DeFi — transforming Bitcoin from a passive reserve into an income-generating asset.
Built on the ERC-4626 vault standard, shBTC represents a user’s staked hBTC position and accrues yield over time, distributed transparently through the protocol’s smart contracts.
How shBTC Works
The conversion process from hBTC to shBTC is initiated through a simple on-chain staking transaction:
Users stake their hBTC into the Syntetika vault contract.
They receive shBTC in return, which:
Retains 1:1 exposure to BTC principal.
Accrues yield generated from fund strategies operated by Hilbert Group.
Remains fully liquid and composable across DeFi protocols (e.g., Aave, Morpho, Pendle).
This ERC-4626 architecture ensures that shBTC can be integrated into the broader DeFi landscape, allowing users to leverage their yield-bearing BTC in lending markets, derivatives platforms, and structured product protocols.
Yield generation is seamless: users maintain BTC exposure, receive high quality risk/return profile, and retain the freedom to deploy shBTC across the DeFi ecosystem.
Yield Generation and Strategy Allocation
The yield associated with shBTC is derived from BTC-denominated fund strategies. These strategies follow different mandates—ranging from basis trade, lending, and yield curve trading—and are designed to deliver attractive, risk-adjusted returns independent of market direction.
Full operational details are available here in the Underlying Strategies documentation. As the protocol expands, Syntetika will onboard additional strategies, creating a diversified revenue engine that balances risk, return, and exposure across multiple products.
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