[Discussion] What coins to include into mBTC?

That’s great to hear on the community call that mBTC is in the near future. There seems to be a lot of tokenized BTC getting created. However, these seem to be the most popular:

Which coins would the community propose to add to the mBTC basket? I’ll add my thoughts later after some others post :smiley:

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Personally I like…

WBTC - Bitgo as a centralized custodian + KYC required
renBTC - trustless smart contract but subjected to smart contract risks

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renBTC holds their ERC20 in a trustless smart contract but all the BTC private keys (I’d say is the most important part) is held by a team of 5 dev’s. All their talk about decentralization is a 'plan for the future." I’d much prefer they place the bulk of their coins with a custodian in this initial/demonstration phase but it is what it is.

That being said, I still like renBTC because it is relatively low cost on/off ramp and it works very well from a user perspective. However, I do not hold any renBTC long term because I personally consider it the most likely to lose it’s peg with some sort of calamity.

I have some more I like, I’ll add to the thread later :slight_smile: Maybe someone mentions them all hehe

I think HBTC and sBTC would be an target.
Is the ERC777 format supported? (imBTC, pBTC)

As everyone has pointed out, I think the highest risk is renBTC, then sBTC.

I really like the usability of pBTC (ptokens.io). There are no fees to peg or unpeg currently. I don’t know about the security of it at this time and also it has a really low market cap ($3.2 million TLV). I’m not sure if it is ERC777 because it’s showing up in my etherscan as an ERC20 token.

I’ll add the one I really like: tBTC. I think it’s perhaps the most trusted. The private key to your deposit is sharded and held by 3 separate parties that stake enough ETH to keep them incentivized to be good actors—but even if they aren’t, they only control 1/3 of the private key. One might say it is like the DAI of bitcoin in the way that is is decentralized and minted.

A big upside of tBTC for mstable is the very high fees to mint because the entire process is completely trustless and requires a LOT of gas. People will much prefer to trade it here :slight_smile:

In my opinion we really need to embrace BTC-pegged tokens outside of renBTC & WBTC because those two coins have an extremely efficient way to trade already. Between wbtc.cafe and even curve.fi implementing the renBTC bridge, there’s not really a big need a btc product yet.

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+1 for tBTC , due to it’s trustless nature, and the overcollateralized Ethereum backing for it. pBTC seems good enough as well, but it is somewhat centralized right now with the VM only being run by the admins. This will change in the near future, though.

There is also the upside to bridge both to other networks, namely Celo for tBTC and EOS for pBTC, with more to come.

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Good to see this discussion up and running - I see the following as decent candidates (list is not exhaustive, haven’t done my research on all the tokenised BTC offerings out there)

  • WBTC
  • tBTC
  • sBTC
  • renBTC

With the new AMM, I’m under the impression too that mBTC should be able to comfortably accomodate up to 6 bAssets, so theres still room for other candidates. There’s probably some strategic angle to be played with Huobi in regards to their USD and BTC offerings too, as neither are in mStable at present.

I think it would be valuable to have a shared and public note that tracks all of these BTC options - perhaps an invite only google sheet for community members or a notion doc. Thoughts? Happy to create one @savannah @derc @dereksilva @james.simpson

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I think WBTC, tBTC, sBTC, and renBTC are the obvious candidates. That’s really good right there. The others may include tokens I like (such as pBTC) as it’s issued on both ETH & EOS blockchains and creates some interoperability—but as it stands does not appear to have a large market cap. Do you think that is a hindrance to having it in the basket?

Something I was wondering on is if the new AMM will penalize/incentivize having a low amount of assets in a bucket. Right now if there’s not a huge demand for an asset, it can go to zero. I don’t know what will happen in the future. My guess is that due to the AMM, we may really need to make sure coins have both sufficient market cap and sufficient daily trading activity. A bit off topic but I believe this sets a framework if we need to go outside the list of WBTC, tBTC, sBTC, and renBTC.

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Hello everyone! Alice from pNetwork here.

Thank you for considering pBTC as an asset to be added to the mBTC basket - I see there are some open points on its security and market cap so I thought I would try and clarify them.

In terms of market cap, the TVL for pTokens is increasing consistently on both chains where it is currently present (Ethereum and EOS). On Ethereum, this is mostly driven by the pBTC on Steroids liquidity mining programme (Uniswap pool currently holds approx. 6M USD).
An interesting point to be made is the opportunity given by interoperability between these two chains (and other networks to be added in the near feature) and the direct integration of pBTC within the Bitfinex exchange that enables direct withdrawals of BTC onto Ethereum’s DeFi (directly from users’ BTC wallets on Bitfinex: https://cryptochronicle.com/bitfinex-announces-support-for-pnetwork-to-bring-crypto-assets-cross-chain/). Such integrations create the opportunity for pBTC to flow frictionlessly across these ecosystems, therefore creating an opportunity and benefit for mBTC should pBTC be supported.

As for security, the entire pNetwork follows a continuous auditing process - a best-in-class auditing process that sees the continuous technical review of code (every change is audited before going to production!).

Similarly to most projects in DeFi, pBTC follows a progressive decentralisation roadmap, but thanks to the use of trustless smart contracts and Trusted Execution Environments, full transparency is guaranteed on the whole cross-chain movement of assets (including all off-chain operations) already in this phase. Because the key-pairs needed to perform such cross-chain actions are generated and managed via TEEs (secure sandbox), the system produces unique transparency guarantees for anyone interacting with pTokens around the status of the validating network.
In other words, it is very impractical and economically expensive for anyone (both internal and external attackers) to compromise the system since the private keys are locked within these secure sandboxes.
More on this and the introduction of a decentralised network: https://medium.com/pnetwork/pnetwork-security-and-progressive-decentralisation-c5552216ca23.

I hope this will be helpful for your evaluation & hope to see pBTC on mSTABLE soon! :raised_hands:

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Thanks for posting in here @alicecorsini, its really useful to have the information laid out and summarised succinctly from a member of the project so thank you.

The only hinderances I see are if the market cap is smaller than the amount required for it to maintain a presence at the target weight set in the new AMM. i.e. this means a mBTC bAsset with a total market cap of 10m would not make sense if the basket total size was 100m and the target weight of 20%. But who knows, this may in fact incentivise people to mint more of the asset to bring it up to weight.

Volatility and hence trading activity will still be desirable with the new AMM, so that certainly will help us compare other candidates.

In the meantime, I’ve created a public sheet that is visible here -https://docs.google.com/spreadsheets/d/e/2PACX-1vS9XzoSqKBjTXq-mlF8Wiky5Ex-AaJ7zlhFAOYaUNFnqTg3awADcHYWWkSUfuKeviXG6qOvbpWErso1/pubhtml

We will use this sheet to track BTC candidates as a team/internally, DM me on discord if you’d like comment access folks!

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Hello,

This is my first message on the forum, so please be nice with me :slight_smile:.

I would definitely start with wBTC and RenBTC as the first one is by far the most reliable representation of BTC on Ethereum, and the second one is kind of its ‘evolution’ toward a more decentralized type of custody.

I wouldn’t include tBTC as they failed several times to successfully launch their product, and the underlying economics don’t make a lot of sense: few people will lock their ETH to bring BTC on Ethereum. ETH can be used to do way greater things.

Let me know your thoughts!
Etienne

Yeah, tBTC is held back the same was DAI is held back—because you need ETH. However, it’s over-collateralized which makes tBTC perhaps more secure/safe than wBTC & renBTC. The issue is not whether the project will succeed long term or be the biggest and the best—just if they can keep the peg. I submit to you that they can because they have the BTC + 150% ETH (so 250% collateral). I agree it’s a bit over the top but if I’m holding tBTC this makes me safe, especially with any failed starts. I’d rather see a delayed/relaunched projects than a hack where users lose funds.

wBTC & renBTC alone do not make for a great basket and they already have very cheap and efficient methods of exchange (cafe.btc and curve.fi). Do you have any other coins you’d like to submit for discussion to the basket?

Thanks for posting! Welcome here :slight_smile: I appreciate the feedback and I’m sure the admins do also :slight_smile: :slight_smile:

What is the minimum market cap for any bAsset? (Is that the name for assets that go into mBTC?)

It will likely be a percentage of the total basket and that percentage will be based on the number of basket assets. It’s not something we can do now, but the new AMM will make this possible to enforce.

For example if we have three bAssets underlying mBTC, then you may want a minimum of 20% of each bAsset to exist at any one point in time to ensure liquidity for SWAP and to minimize risk. If there are only 50 pBTC in existence (just making up numbers here) but thousands of WBTC and tBTC, then it would be really hard to justify adding pBTC as a bAsset at this time as we could potentially swallow the entire supply just to keep it at the minimum basket weight.

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