Request for feedback: Options for tBTC pools

Proposals
#1

Summary:

The tBTC team proposes adding a tBTC/wBTC or tBTC/[renBTC/sBTC/wBTC] pool. Adding a tBTC pool will further increase the liquidity of Bitcoin on Ethereum and make it easier to swap between assets.

Vote on Signal

Abstract:

Hi everyone, I’m Matt Luongo, the project lead for tBTC. The intention for this post is to introduce tBTC to the Curve community, and take a read on how the community would like to see tBTC included in a pool.

tBTC is a Bitcoin sidechain on Ethereum, built to give Bitcoin the capabilities of Ethereum and bring additional collateral to DeFi. The asset (TBTC) is an ERC-20 pegged to Bitcoin, it can be minted or redeemed for BTC by anyone and without intermediaries. Instead of relying on a single custodian like wBTC or federation of custodians like Liquid, tBTC is supported by a decentralized bonded multi-federated peg model using ECDSA technology.

tBTC is built on the Keep Network, and as of launching this week already has 24.21M USD locked in the network (22.69M USD in KEEP, 1.39M USD in ETH and 0.26M USD in BTC). We’ve decided to launch slowly and safely with a 9 week graduated cap, currently the cap is at 100 BTC but will rise to 250 later this week. See the full schedule here. Future plans for tBTC include pointing at least 5% of the KEEP supply at various liquidity rewards.

Motivation:

With several BTC on Ethereum choices out there, the tBTC team wants to gauge the Curve community’s appetite for a tBTC pool. Our team’s initial thought was to keep it simple with a tBTC/wBTC pool, but are also interested in hearing about interest in something like a tBTC/[renBTC/wBTC/sBTC] pool.

Please vote below or submit options for other assets you’d like to see in a pool.

Specification:

The tBTC contracts just went live: https://etherscan.io/token/0x8dAEBADE922dF735c38C80C7eBD708Af50815fAa

tBTC is fully open source and has been audited by ConsenSys Diligence, Sergei Delgado (an independent BTC researcher) and Trail of Bits. See audit details

For:

More pool options for Bitcoin on Ethereum will bootstrap liquidity as this tokenized Bitcoin grows as a whole.

Against:

Different BTC on Ethereum protocols come with different risk models, liquidity, etc.

Please refer to this comment for pros and cons of meta pool vs new pool: Request for feedback: Options for tBTC pools

Poll:

Free to vote: https://signal.curve.fi/#/curve/proposal/QmQ6bqS9JjNvTZf4a8CRDeVad3g5r6C2WZiVC3hgcZVMz4

7 Likes
#2

For Metapool:

Less liquidity needed, no dilution of existing liquidity, more utility through Synthetix, more volume

For new pool:

Reduced systemic risk (sBTC would be unaffected), no REN/sBTC systemic risk.

What are metapools?

The newer system of metapool allows to trade an asset (tBTC in this case) to seemingly trade with another base pool (in this case sBTC pool).
The alternative would be to create a new tBTC/wBTC pool

Meta pools allow to deposit and withdraw one asset whilst trading with another pool. The new system will help prevent dilution when new assets are added to Curve.

4 Likes
#3

Against. Way too early…Given tBTC’s past… I’d encourage an abundance of caution here.

4 Likes
#4

100 BTC cap to start? Too small…I think this project needs to bake for awhile.

1 Like
#5

If we’re moving to metapools, which pool makes sense as the core? sBTC seems like it could be powerful because traders will be able to go through Synthetix infinite liquidity exchange. But we just launched 3pool to be the core USD pool, which explicitly removes sUSD

#6

@StevieWonder Renbtc is actually still very centralized and closed source, the market needs a hedge against a single point of failure.

I vote FOR integration!

3 Likes
#7

I think we should wait at least 2-3 days. Because if tBTC breaks down like last time , it will be very bad. We need to wait and be careful.

#8

Keep in mind, the official DAO vote would take a week or so so this wouldn’t happen for at least another 10 days.

3 Likes
#9

Seems way to early to be considering this. Why go ahead with a guarded launch and then immediately integrate tBTC in various protocols?

The whole idea is to make sure the network can run smoothly unlike the first time, so I think liquidity shouldn’t be a primary consideration at the moment. If tBTC needs to coordinate a withdrawal with users for some reason, having supply on DeFi protocols would make it more difficult IMO.

#10

Exciting to see tBTC coming to Curve!

I think a tBTC / wBTC pool would be better for most users. It is easy to get wBTC for many on Uniswap or a centralised exchange like Binance, but then if they want trustless Bitcoin and it’s a tBTC / metapool —> that’s one additional hop and likely to cause more slippage because arbitrage will be less efficient on a tBTC / metapool.

Finally, thinking just about myself, I’m comfortable with WBTC and TBTC the most out of these 4 options, but that’s subjective.

To the point of tBTC risk, @charlie_eth makes a good point that the vote will take several days so, if there is an issue by then, the whole thing can be stopped.

3 Likes
#11

From a liquidity perspective a pool won’t be efficient without there being a significant amount of capital in the pool, and the TBTC supply will be capped for 9 weeks, and this doesn’t guarantee the supply will grow anyways. Waiting for the supply to grow before committing is prudent here.

From a security perspective it also makes sense to wait a significant amount of time to see whether the protocol holds under pressure from being live on mainnet. There is always the possibility of vulnerabilities, and generally time multiplied with money at stake is a good way to find that out.

1 Like
#12

Liquidity is a chicken / egg problem. We have 5% of our token supply to dish out in liquidity rewards — but we need the right venue.

Note: Might be worth disclosing your relationship with other projects.

1 Like
#13

I think we should wait at least 2-3 days.

Very much. The system has been running for a week and change, and actually just hit the 250 BTC supply cap. Seems prudent to give it another week.

2 Likes
#14

I agree that from a security perspective, we should move cautiously. But to your point on the limitation on tBTC liquidity- it’s a pretty quick ramp up. Starts at 100 BTC but ramps up weekly to 3000 after 9 weeks. Also, it’s a bit of a chicken/egg scenario. Deny a new asset exposure to DeFi until it increases it’s liquidity, inhibit its ability to increase liquidity.

I think an actual decentralized BTC token on Ethereum is a big game changer, and we should take that really seriously. if tBTC works as intended, it’s making a major step beyond what renBTC and wBTC currently do for the ecosystem

2 Likes
#15

Incorrect. From their CTO:
"sMPC code is open-source (Trail Of Bits audit is finished): https://github.com/renproject/mpc

This is the code that ultimately keeps funds secure. This, the consensus mechanism we use, the networking mechanism we use, and the Multichain, essentially make up all of the interesting parts of our codebase."

Also it’s obvious you’re a tBTC burner account, so keep it up :man_shrugging:

#16

Not that it matters at all to this proposal… but the node code is still closed source. Check out the darknode repo.

#17

@mhluongo Do you guys plan to incentivize the tbtc curve pool? Similar to how Synthetix has an incentive for the susd pool (sbtc in the past).

2 Likes
#18

What jiecut wrote above. What is required for curve to be that venue?

2 Likes
#19

Thought you all were about a “slow and safe adoption” because you care so deeply about DeFi’s safety (aka more so due to your team’s past folly…)?

Seems your actions (submitting a proposal for immediate adoption) are speaking louder than words?

#20

what’s up with the ad hominem attacks, @StevieWonder? Nobody is forcing you to provide liquidity to a tbtc pool