# What is Sirius (Liquidity Baking)?

**Sirius DEX**, often referred to by its former name **Liquidity Baking** (or simply **LB)**, is a cornerstone of the Tezos liquidity economy. Conceived by Arthur Breitman, co-founder of Tezos, it was implemented as part of the blockchain’s protocol upgrade in 2021. This innovative mechanism integrates directly into the Tezos protocol, making it one of the most significant advancements in the ecosystem’s economic infrastructure.

***Note**: The terms "LB" "Sirius DEX," "Liquidity Baking," and are often used interchangeably*

## So, what is it?

At its core, **Liquidity Baking (LB)** is an on-chain exchange contract that pairs two assets:

* **Bitcoin (via tzBTC)**: A wrapped version of Bitcoin issued by Bitcoin Association Switzerland to operate on the Tezos blockchain. 
* **Tez (XTZ)**: The native cryptocurrency of the Tezos blockchain.

Liquidity providers who contribute to this exchange receive rewards beyond just trading fees. The **Tezos blockchain itself** issues an additional subsidy specifically to incentivize liquidity provision for this pair, making LB the **largest source of liquidity on Tezos**.

***Note:** Since Bitcoin is not native to the Tezos blockchain, LB relies on* [*tzBTC*](https://docs.tezex.io/sirius-liquidity-baking/tzbtc-wrapped-bitcoin)*, a wrapped Bitcoin token that maintains a 1:1 backing with BTC*. 

## What is its purpose?

The primary purpose of Liquidity Baking is to **elevate the status of tez (XTZ) as a store of value**.

While LB provides a significant **secondary benefit** of bootstrapping liquidity for the Tezos ecosystem, this is not its core goal. Instead, the mechanism is designed to enhance XTZ’s utility and prestige by pairing it with Bitcoin, the leading store of value in cryptocurrency.