PDP 30: Add mBTC/tBTC v2 Feeder Pool

Posted on behalf of the mStable ProtocolDAO

Simple Summary

It is proposed to add an mBTC/tBTC v2 Feeder Pool as specified in MIP 9. This Feeder Pool will replace the current mBTC/tBTC Feeder Pool and incentives should migrate to the newly created pool. This upgraded tBTCv2 asset is launched by Threshold network that recently was born out of a merger from Keep and NuCypher. The tBTC v2 addresses drawbacks of scalability that was present in v1.

Abstract

It is proposed to add an mBTC/tBTC v2 Feeder Pool. The MTA rewards are also to be redirected from the existing mBTC/tBTC Feeder Pool to the one proposed here.

tBTC is a fully trustless, decentralized and censorship-resistant asset bridge between bitcoin and Ethereum blockchains. It is built to give Bitcoin the capabilities of Ethereum and bring additional collateral to DeFi. The asset 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. Being alive and without incidents for a whole year, reassures that in spite of being a cornerstone of advanced cryptographic achievements TBTC works as intended.

With tBTC v1 a drawback has proven to be its scalability. Capital intensity imposed restrictions on the system’s ability to grow beyond a certain point. tBTC v2 addresses this drawback while enhancing the trustless decentralized features of v1.

Keep Network and NuCypher combined their collective efforts in a new project called Threshold Network. tBTC v2 is the first project to launch under the new structure.

The contract to swap tBTC v1 to tBTC v2 is accessible for users at the address: 0x6590DFF6abEd7C077839E8227A4f12Ec90E6D85F

After the launch of the mBTC/tBTC v2 Feeder Pool, MTA incentives for the mBTC/tBTC v1 Feeder Pool will not be topped up anymore and therefore incentivising the migration to tBTCv2 and the newly deployed Feeder Pool.

Motivation

The proposed Feeder Pool is the natural continuation of supporting the tBTC asset. The upgraded tBTC contract addresses limitations while preserving decentralization and trustlessness. mStable is one of the first to launch a tBTCv2 Pool and is posed to capture the majority of swap volume for this asset. At the same time, users can bridge their BTC over to Ethereum in a trustless manner via tBTCv2 and access yield products offered by mStable.

Additionally, this would enhance the partnership with the newly formed Threshold Network and open up the possibility for dual incentives; Threshold Network is planning to launch its new token T and is actively looking to incentivise liquidity. This would make this Feeder Pool an attractive choice for investors who seek yield on their BTC on Ethereum.

Permissions

After deploying this Feeder Pool contract, MTA incentivisation for the existing Feeder Pool at the address 0xb61a6f928b3f069a68469ddb670f20eeeb4921e0 with the vault address 0x760ea8cfdcc4e78d8b9ca3088ecd460246dc0731 would expire and not topped up anymore.

This MIP grants the ProtocolDAO permission to adjust the Amplitude coefficient (A) when deemed necessary.

Next Steps

Pending no significant changes to its content, this proposal will be taken to snapshot vote on Monday, 11th October 2021. Voting will be open for a 5 days window to give adequate time for a concurrent discussion. Governors can change their vote at any time should the discussion sway their decision. We look forward to hearing what MTA token holders have to say and seeing how they cast their votes.

7 Likes

Thanks for the proposal ! This is a no-brainer imo.
Fully support the proposal. :+1:

3 Likes

Hot stuff here. Super excited for TBTCv2 and the new Threshold network with Keep and Nucypher merging. Let’s get stable. Full send on this pool!

3 Likes

Thank you for proposing this. Also supporting this proposal.

I think this is a win win for both projects.

2 Likes

Happy to see mStable is working to integrate tBTC v2! I fully support this proposal.

1 Like

Fully support this :muscle:

1 Like

I will be voting FOR this. Continuation to support the new version of the tBTC token is a logical step.

1 Like

upvoting and I think it sets up for future and closer collab :wink:

1 Like

Vote is up on: Snapshot