Request for Yearn Community Support for TBTC and creation of TBTC Vault (decentralized Bitcoin)

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Yearn Community Support for TBTC and creation of TBTC Vault (decentralized Bitcoin)
By @ramaruro and @Estebank

Summary
We request the support from the Yearn Community for TBTC DeFi adoption and use for Yearn Vault Strategies.
Specifically we require support from the Yearn Community in its adoption at AAVE, MakerDAO and Compound. This will allows Yearn to use TBTC as an Asset for a new or existing Vault.

TBTC is the first fully decentralized Bitcoin version on Ethereum (as opposed to centralized versions e.g. WBTC, partially centralized, e.g. renBTC or synthetic versions, e.g. sBTC)

Details
tBTC is a decentralized, trustless and insured custody system for Bitcoin that creates TBTC Ethereum ERC-20 tokens, with a 1:1 BTC supply peg. Bitcoin holders who want to spend their BTC on Ethereum and DeFi don’t have to trust custodians, aka signers, because signers must deposit a bond higher than the value of the BTC they hold in custody.

The tBTC system is developed by the Keep Network.

It has already been added to Curve Pool
There is a proposal at AAVE for its adoption.

Why is this Beneficial for Yearn
Vault TVL Growth : Bitcoin on Ethereum is a fast growing category of Assets. Bitcoin has an enormous amount of value and it is important to attract that volume to Yearn and DeFi in general.

Benefits for the general DeFi Community

Bring Optionality to the DeFi Community with a decentralized Bitcoin Exposure.

DeFI Space Risk Mitigation: TBTC is decentralized and does not have a central point of failure like renBTC or WBTC. Its addition reduces systemic Risk in the DeFI Ecosystem, something that seems to be forgotten in the current times, where so many centralized assets are being used.
Decentralized Assets are essential for DeFi to stay “Decentralized”. It is very important to keep that prospective in mind as a lot of liquidity based on Centralized Assets has flown into the DeFi Ecosystem.

Current TBTC Liquidity and Availability
TBTC has been launched slowly and safely with a 9 week graduated cap. See the full schedule here.

TBTC Contract: (https://etherscan.io/address/0x8daebade922df735c38c80c7ebd708af50815faa)

Pools available in Uniswap, Mooniswap, Curve and Balancer

References

tBTC Website: https://tbtc.network/

Discord: https://discord.com/invite/TytRYBe

Twitter: https://twitter.com/keep_project

Developer Resources: https://tbtc.network/developers/

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With Aave / MakerDAO / Compound adoption we could make a fully decentralized, trustless yield earning yTBTC Vault.

We imagine this new ytBTC Vault which should pursue tBTC growth, just as yETH. Which implies use tBTC as a collateral, borrow stable, invest them, and with the returns buy more tBTC.

This should generate huge interest in the BTC community since it fully associates with Bitcoin principles !

And last but not least drive more fees/revenue to YFI ecosystem !

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I think this is a great idea. You have my vote

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Great idea. Would give my support

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I watched the test period, so I support it!

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I am completely on board.

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Opposed is no need to rush adding something that is around a week old we should wait to evaluate it after it is battle tested over a few months

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Disclaimer: I’m invested in Ren.

While the excitement is understandable, tBTC just launched last week, and spending resources on promoting a untested system seems a bit unnecessary when there already exists a BTC vault generating yield on Bitcoin, through Bitcoin versions that we are much more certain about when it comes to risks. For instance, tBTC has had 3 liquidations in the last week totaling 20.2 BTC, resulting in signers’ bonds getting liquidated and BTC getting locked forever (https://allthekeeps.com/deposits).

There is not much to discuss when it comes to vault and strategies either because tBTC isn’t added on any relevant platform yet. Later down the road that will change of course, and then it would be appropriate to have a discussion and proposals.

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Hey Max! Awesome that you’re following tBTC deposits, but FYI, that’s not what liquidation means :slight_smile:

Liquidations happen when a redeemer isn’t delivered their BTC in a timely manner, and opt instead to take the signers bond (typically at a generous profit). They can also happen when ETH/BTC price swings happen quickly, and signers don’t redeem their deposits. They don’t imply that BTC has been lost, and as far as I know about the liquidations about, only one was due to lost key material versus delays.

Thanks for taking such a strong interest in the project!

EDIT:

Source: I’m one of the protocol designers.

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You guys realise this has been running for not even 1 week right? Give it a few months to prove that it works properly then we can reconsider.

Why are we trying to rush things?
I believe the community needs to do all it can to protect its good name and avoid another EMN.

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Completely agree with your view and if after few months it works great, it’s defunately an awesome asset to bring to yearn protocol.

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i’m in. will vote yes.

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It’s too early for tBTC, this could happen again with no way to fix it:

This should be tested and run successfully for a few months before it is proposed. Strongly against

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Like many others here, I would like to see tBTC mature and operate for a while before creating a vault. If Maker and Aave add it as collateral, then that makes things much easier.

Mainly, I think we need to wait until an actual strategy is proposed. This seems more like a hype post to try and get Yearn users to advocate for tBTC on other governance platforms– which I’m strongly against. Proposing that Maker whitelist our oracles or for Maker/Aave to add one of YFI/yUSD as collateral is one thing, but advocating for a completely separate token feels very different. If the other platforms decide to add the token, then we can move from there.

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Agreed, I don’t think Yearn is the right place for this, or that this is the right time — there’s nowhere to get yield on tBTC today. When there is, it makes more sense.

I’d think the 1000 BTC supply cap makes sense here, and I know some other teams are using it as an integration milestone.

5 Likes