Echo Protocol (ECHO): Turning your BTC into yield across chains
Bitcoin has a market capitalization of more than $2 trillion in value, and yet most BTC remains idle, due to fragmented standards and limited yield opportunities. Enter Echo Protocol, a Bitcoin liquidity aggregation and yield infrastructure layer that promises to solve this fundamental problem by unifying BTC assets and enabling cross-chain yield generation.
This article examines Echo Protocol's approach to Bitcoin yield optimization, as well as its history, road map and comprehensive feature suite, and considers whether this protocol can unlock the true potential of Bitcoin across the entire multichain DeFi ecosystem.
Key Takeaways:
Echo Protocol is a Bitcoin liquidity aggregation and yield infrastructure layer that unifies BTC assets across different standards.
Users begin by staking native BTC on Bitcoin Layer 2 networks like Babylon to receive BTC LSTs, or they can use existing wrapped Bitcoin assets like wBTC and fBTC.
What is Echo Protocol?
Echo Protocol is a Bitcoin liquidity aggregation and yield infrastructure layer that unifies BTC assets across different standards, enabling users to stake, bridge and earn yield through innovative BTCFi products while maintaining full transparency and security.
History of Echo Protocol
Echo Protocol launched in August 2024 under the leadership of CEO and co-founder Jonathan Phay, alongside co-founder Huan Tse. Phay, who also co-founded Gate.com, brings significant experience in crypto infrastructure, while Tse contributes his finance background from NYU.
Just two months after launch, Echo closed a pre-seed funding round backed by top-tier investors, including Spartan Group, ABCDE Capital, Arthur Hayes' Maelstrom fund, Selini Capital, Web3Port, Auros and strategic partners like Aptos, Movement Labs and B² Network.
Since its launch, Echo has achieved remarkable traction, with over 3,000 BTC minted through its infrastructure, and has become the largest protocol on Aptos by total value locked (TVL), reaching an all-time high of $878 million. The protocol's aBTC token now represents around 65% of all Bitcoin bridged to Aptos, demonstrating strong product/market fit and ecosystem adoption.
What does Echo Protocol aim to achieve?
Echo Protocol aims to eliminate the fundamental fragmentation that prevents Bitcoin from accessing DeFi opportunities across different blockchain networks. With over $2 trillion in Bitcoin value largely sitting idle, holders aren't able to maximize their returns — when they could be generating yields through sophisticated financial strategies.
The protocol aims to establish a universal Bitcoin aggregation layer that facilitates seamless asset transfers between ecosystems. Instead of Bitcoin holders being forced to choose between isolated networks, Echo envisions unified access to DeFi opportunities across Move-based chains, such as Aptos and Movement, alongside EVM networks like Morph and Hemi.
Targeting everyone from retail to institutional users, Echo aims to enable complex derivatives, structured products and programmable Bitcoin instruments that rival traditional finance (TradFi) offerings while maintaining the decentralized ethos that makes Bitcoin valuable.
The protocol simultaneously addresses critical transparency gaps in Bitcoin liquid staking that have created systemic risks. Echo's robust Proof-of-Reserve implementation, backed by reliable oracle infrastructure, eliminates the depegging concerns and trust issues that currently threaten lending protocol stability and hinder institutional adoption.
How does Echo Protocol work?
Echo Protocol operates through a streamlined process that transforms idle Bitcoin into yield-generating assets across multiple blockchain networks. Users begin by staking native BTC on Bitcoin Layer 2 networks like Babylon to receive BTC LSTs, or they can use existing wrapped Bitcoin assets like wBTC and fBTC.
These Bitcoin assets are then bridged through Echo's Vault system to their chosen destination network. Upon bridging, users receive Echo's unified BTC tokens: aBTC on Aptos, mBTC on Movement, mphBTC on Morph or hBTC on Hemi. Each unified token maintains strict 1:1 backing with the original Bitcoin assets through real-time Proof-of-Reserve verification.
Echo's security infrastructure relies on a decentralized network of validators and submitters. Validators monitor deposit and withdrawal events, signing transactions with private keys before sending them to submitters who verify and process these events on the target blockchain.
The protocol's key advantage is that it enables multiple yield strategies to be used simultaneously. Users earn Bitcoin Layer 2 staking rewards, accumulate Echo points, generate DeFi yields through lending and liquidity provision and access ecosystem-specific incentives — all while maintaining full liquidity through their unified BTC tokens.
Features of Echo Protocol
Echo Protocol offers the following comprehensive suite of features designed to unlock Bitcoin's potential across Move and EVM networks.
Bridging uBTC with Echo Vaults
Echo Protocol's bridging mechanism enables seamless transfer of uBTC and other Bitcoin assets across different blockchain networks. Users deposit Bitcoin assets into Echo Vaults (the protocol’s liquid staking solution), where they’re securely locked. The particular vault then mints Echo's unified tokens, such as aBTC on Aptos, mphBTC on Morph or mBTC on Movement, which users receive on their chosen destination network.
Echo Protocol’s system enhances security by restaking Bitcoin assets, rather than direct bridging, and utilizing reliable hashed-timelock contracts (HTLCs) on the Bitcoin Layer 1. It maintains network integrity through a decentralized validator and submitter system that monitors all transactions and automatically blocks malicious actors.
Bridging requires a 0.2% cross-chain fee, with a minimum amount of 0.0005 BTC for both deposits and withdrawals. The protocol supports multiple Bitcoin standards, including uBTC from B² Network, and wBTC and fBTC from EVM networks, ensuring compatibility across the entire Bitcoin ecosystem.
Users can earn up to 30% APY through Echo Vaults, and can withdraw funds at any time without penalties. In addition to these rewards are further incentives, including Bitcoin L2 points, Echo Points and ecosystem-specific rewards.
Echo Strategy
Echo Strategy provides automated yield optimization across DeFi protocols by integrating multiple platforms to secure the best yields and borrowing rates. The system offers sophisticated strategies, including Leveraged Liquid Staking and Lending/Borrowing optimization, with automatic rebalancing of user assets to maximize returns.
The platform's flagship eMSTR strategy represents the first truly on-chain leveraged Bitcoin position without liquidation risk. By utilizing convertible notes and advanced financial engineering, eMSTR provides users with a minimum of 2.5x leverage for BTC while capturing both TVL and premium value directly, rather than surrendering it to arbitrageurs.
Users can customize their loan-to-value (LTV) ratios based on risk tolerance, with the system displaying estimated APY up to 7% and adjusting fund flows accordingly. The strategy platform charges a 5% commission fee, and allows users to monitor positions and claim rewards through a dedicated dashboard.
Echo Lending
Echo Lending is a decentralized lending protocol that allows users to deposit aBTC and other unified Bitcoin tokens to earn yield. The protocol currently offers up to 12% APY for Bitcoin deposits, with rates determined by supply and demand.
Users who supply assets to Echo Lending earn interest on their deposits while retaining the ability to withdraw their funds. The protocol also rewards participants with 2x Echo Points multipliers, which contribute to token distributions.
The platform uses oracle feeds for asset pricing, and employs automated liquidation systems to manage risk. While Echo Lending operates on the Aptos blockchain, it also integrates with other DeFi protocols in the ecosystem.
Airdrop
Echo Protocol launched its ECHO token airdrop on Jul 2, 2025, distributing 15% of the total token supply to early users and community contributors. It allocated 7% of tokens for immediate claiming on Day 1, with an additional 8% reserved for future campaigns and ecosystem partnerships.
The airdrop was based on Echo's comprehensive Points system that tracks user activity across the platform. Users earned Points by depositing into Echo VaultS, participating in Echo Strategy, lending to Echo Lending and staking. The system uses different multipliers for various activities, with no minimum threshold required for eligibility.
Points awarded for the airdrop were calculated through daily snapshots, with users needing to maintain positions for at least 24 hours to qualify. All Echo Points earned before Jun 29, 2025, snapshot counted toward airdrop eligibility, rewarding 74,248 unique addresses that earned 100 or more points with bonus tiered allocations.
Echo Protocol road map
Echo Protocol has achieved remarkable growth in less than a year since launching in August 2024, building a community of over 1 million members called "Nekos" and becoming the second-largest protocol on Aptos by TVL, with $641 million locked as of Jul 3, 2025.
Echo has built a genuine BTCFi engine with Echo Vaults and Echo Lending live on its mainnet, and by supporting cross-chain Bitcoin bridging across Aptos, Movement, Morph and Hemi. The protocol has also partnered with leading Aptos DeFi protocols, while at the same time implementing a robust Proof-of-Reserve mechanism.
In addition to securing institutional backing through its pre-seed round, Echo Protocol has also participated in Aptos Foundation's LFM program for strategic mentorship and ecosystem growth support.
The protocol successfully launched its ECHO token on Jul 2, 2025, distributing a portion of the 15% total supply allocated for airdrops. According to the team, ECHO's launch marks the beginning of community empowerment and shared governance, positioning the token to unlock the next era of BTCFi innovation.
Closing thoughts
Echo Protocol has emerged as the comprehensive Bitcoin infrastructure solution, unifying Bitcoin liquidity across multiple blockchain networks and delivering innovative BTCFi products that maximize yield while preserving Bitcoin's core principles.
With $641 million in TVL achieved in less than a year, institutional backing and the recent launch of the ECHO token, Echo Protocol is well positioned to become the foundational Bitcoin infrastructure across the entire multichain DeFi ecosystem.
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