Proposal to Add dlcBTC/WBTC to the Gauge Controller
Author: Aki Balogh
Date: 2024-07-07
Summary
This proposal seeks to add the dlcBTC/WBTC pool’s gauge to the Gauge Controller on the Ethereum network.
Pool Address: dlcBTC/WBTC Pool
Gauge Address: Gauge on Arbitrum
References/Useful Links
dlcBTC
Websites: DLC.Link, Building a Better Wrapped Bitcoin for DeFi
Documentation: dlcBTC Documentation
Analytics: dlcBTC Analytics
CoinGecko: dlcBTC on CoinGecko
GitHub: dlcBTC GitHub
Discord: DLC.Link Discord
Twitter: dlcBTC Protocol Twitter, Aki Balogh Twitter
Telegram Community: English, Chinese
WBTC
Website: wBTC
Documentation: wBTC Documentation
Analytics: wBTC Analytics
CoinGecko: wBTC on CoinGecko
GitHub: wBTC GitHub
Twitter: wBTC Protocol Twitter
Protocol Description
dlcBTC
dlcBTC is a decentralized wrapped Bitcoin on Ethereum, enabling Bitcoin holders to participate in DeFi protocols while retaining full ownership of their assets. dlcBTC leverages Discreet Log Contracts (DLCs) for secure cross-chain transactions, ensuring trustless and decentralized asset management. Unlike other bridges, dlcBTC is theft-proof as funds can only return to the original depositor. dlcBTC is minted by a permissioned set of merchants managed by the DLC Foundation, ensuring self-custody and reducing central points of failure. dlcBTC operates as an oracle-free system where 1 BTC = 1 dlcBTC, and its contracts have minimal parameters, making it a fully automated and robust solution.
WBTC
WBTC (Wrapped Bitcoin) is a tokenized version of Bitcoin (BTC) that runs on the Ethereum blockchain. WBTC is backed 1:1 with Bitcoin and is managed by a consortium of custodians and merchants. WBTC is held in centralized custody by BitGo, introducing counterparty risk. WBTC enables Bitcoin holders to use BTC in the Ethereum ecosystem and access decentralized finance (DeFi) applications.
Motivation
Incentivizing the dlcBTC/WBTC pool is essential to provide deep liquidity for both dlcBTC and WBTC, promoting their usage within the DeFi ecosystem. This will enhance the trading experience for users, ensuring low slippage and high availability for both tokens. Additionally, it will support the broader adoption of decentralized Bitcoin solutions in DeFi, fostering a more robust and diverse ecosystem.
DLC.Link has committed to co-incentivizing the dlcBTC/WBTC pool to ensure its success and sustainability. This strategic collaboration aims to attract a significant amount of liquidity, thereby enhancing the pool’s depth and efficiency.
Specifications
Governance
dlcBTC operates with a minimized governance framework, detailed in this forum post. The protocol’s contracts have minimal parameters and operate as an oracle-free system where 1 BTC = 1 dlcBTC. This soft peg is maintained through market makers such as Amber Group.
Oracles
dlcBTC utilizes a Chainlink proof of reserve feed to ensure transparency and trust in the system. That feed can be seen here: Chainlink dlcBTC PoR feed on Arbitrum
Additionally, the Curve BD team has built a custom oracle combining two NG pools (e.g., dlcBTC-WBTC and tricrypto-crvUSD pools). Details here: Custom ngOracle contract
Audits
Lightpaper & Audit Reports: Lightpaper and Security Audits
Lightpaper: dlcBTC Lightpaper
Original DLC Whitepaper (MIT, 2018): DLC Whitepaper
MetaTrust Security Audit - May 2024: MetaTrust Audit
CoinFabrik Security Audit - Nov 2023: CoinFabrik Audit
CoinFabrik Platform Design Review - Aug 2023: CoinFabrik Design Review
Centralization Vectors
dlcBTC protocol has no major centralization vectors. Depositors’ Bitcoin is secured in a Discreet Log Contract (DLC), a special type of pseudo-programmable multisig that is supported natively on Bitcoin L1. Mint and burn signals are relayed through DLC.Link’s Attestor network (powered by node operators including Hashkey Cloud, OKX and Everstake).
However, the attestors cannot receive funds. Attestors cannot maliciously divert or burn a depositors’ BTC collateral, and the collateral can only be released to the wallet address that provided it.
dlcBTC is not a Bitcoin L2. DLCs are secured by the full hashrate of the Bitcoin network and utilize Arbitrum validators.
Market History
dlcBTC is a new asset supported by our initial merchants: Amber Group, IMC, and soon others including HashKey OTC, Time Research, and Psalion. Amber Group has recently minted an initial $1 million worth of dlcBTC, with additional merchants set to contribute significantly.
Also, dlcBTC has passed the first of three proposals to list as collateral on Aave: TEMP CHECK Onboard dlcBTC to Aave v3.
Voting is Live!
https://dao.curve.fi/vote/ownership/782
https://crvhub.com/governance/ownership/782
Convex Snapshot Link