YIP 42: Add RenBTC to yVaults

Contributors:

Oh my…

wBTC has pretty good growth rates as seen on defipulse but as a custodial solution is hampered by trust-based systems which BTC holders do not by and large feel comfortable with.

RenBTC is a tokenized representation of BTC on the Ethereum blockchain. It is an ERC20, and backed 1:1 with real BTC locked in RenVM, a decentralized custodian. It is redeemable at any time for real BTC.

When Curve created an opportunity for RenBTC to generate returns, the RenVM TVL growth chart exploded. This is a clear signal that when the right solution is available, there is a LOT of BTC waiting on the sidelines to jump into farming yield on ETH. Let’s be there for them.

MakerDAO recently (2-3 weeks ago) greenlit RenBTC as collateral. Links in references below for evidential purposes. It’s coming soon.

Let’s allow users to deposit BTC directly via RenVM Bridge on our site like Curve does for deposits, we give user yRenBTC, turn their BTC into RenBTC, Create a CDP, manage collateral and use our vaults to generate yield, which is used to buy RenBTC on the market and deliver returns to depositors as RenBTC. This allows a user to deposit BTC and increase their BTC stack while also generating significant buy pressure on the market for BTC.

It is also possible to directly deposit the RenBTC to Curve and farm CRV, with returns delivered as more RenBTC to depositors.

Update: It is also possible to immediately accept RenBTC and deploy to CREAM farming as is currently conducted for yYFI Vault. The direct BTC > RenBTC bridge can be implemented later.

Few understand…

  • Capture up to $214b in AUM from BTC holders who want to passively grow their BTC holdings
  • First big mover advantage. There is room to generate significant goodwill from bitcoin holders ($214b in potential AUM) by creating the first truly passive method to generate returns in BTC using the best strategy available at any time.
  • AUM go BOOM untz untz untz

Specification:

  • Add a new Vault row in Table for yRenBTC Vault
  • Create a RenVM Bridge deposit form in Vault Product similar to how Curvefi does it here (click X on BTC icon)
  • User deposits BTC (or RenBTC if they already have it), we give user yRenBTC, turn their BTC into RenBTC, Create a CDP, manage collateral and use our vaults to generate yield through whatever method using DAI, which is used to buy RenBTC on the market and deliver returns to depositors as RenBTC. Or directly use RenBTC to farm CRV.

Poll:

  • FOR: YES! Let’s add yRenBTC Delegated Vault as SOON as it’s available.
  • Against

0 voters

References:

11 Likes

Thanks for putting this up AZ,

renBTC has recently been added to CREAM.FINANCE - current APY is 0.48% with a 6.48% CREAM distribution on top. This could have some great compounding returns for BTC holders using renBTC here.

Wait is this AZ or another ?

Either way I could see Andre building a similar strategy around this as he has with YFI vault now. Also - given the rates available for return on BTC in DeFi - I would expect to see a fair bit of the TVL gravitate to this vault.

5 Likes

Yes it’s AZ :slight_smile: can’t change my username and don’t want to make a new one

3 Likes

+1 Yes! The “one step” renvm bridge (like curve) and the “automatic yield farming” of Yearn, will make it an easy toe dip for BTC hodlrs to try yield farming defi for the first time. (I’m not concerned with renbtc vs wbtc, I’m MUCH more interested in attracting “new” BTC into the defi ecosystem, which is WAY bigger market than existing wbtc/renbtc)

Ren has a good balance between smart users and meme generators—they’ll do all the marketing for us automatically. Also, renbtc pools already exist on Curve (and Curve is always a good backup strategy for our Vaults; advantages are saving on gas and stronger together voting and automation vs doing it yourself).

Long-term, we want our devs to have close relationships for long-term working partnerships. Strong experience in working with renvm will make it easy to create products for other chains they bring on (bch, zec…doge, dgb, etc.). Someday, we will have a vault for every major token and chain, the only question is in which order. In deciding the order, it is also good to think about the platform itself (so not just renbtc, but renvm future coins/chains) Therefore, I would prioritize renbtc over wbtc (although both are necessary and good).

7 Likes

Great notes!
Yes, targeting RenBTC because it expands the market.

5 Likes

@dripdrop said
I don’t know much about it, but likewise would we need/want a MKR BTC Oracle like the prior post? Seems like once we’ve got the ETH USD Oracle it should be easier to get the next one voted in.

2 Likes

I like this. This might also bring in some maxis, they would finally be able to yield farm without feeling bad.

5 Likes

They will finally YIELD! :slight_smile:

2 Likes

Yes. This will be the turning point for BTC maxis, transforming crypto entirely.

8 Likes

Great to bring in the bitcoin stash :wink:

1 Like

Yes please I have wanted this vault since day one.

2 Likes

5 Likes

Found the bitcoin Maxi.

2 Likes

One issue worth planning for is that Maker has debt ceilings, and the wBTC debt ceiling has maxed out several times (same issue with ETH CDP’s but I expect renBTC to have a much smaller debt ceiling). I.e: we need to know if a debt ceiling has maxed out, and if so users won’t be able to use this vault strategy on Yearn until there is space available.

5 Likes

Ren would love this! i think we could soon follow with a ren delegated vault as well.

7 Likes

For record

Strategy options / sequence:

Strategy 1: Accept RenBTC deposits immediately without RenVM bridge, start farming CREAM the same way as yYFI Vault, and deliver returns for depositors as RenBTC
Strategy 2: Accept RenBTC deposits immediately without RenVM bridge, start farming CRV the same way as yCRV Vault, and deliver returns for depositors as RenBTC
Strategy 3: Soon as sensible, add RenVM for Direct BTC Deposit as an option on Product Pages
Strategy 4: When MakerDAO launches RenBTC collateral, allow users to deposit BTC directly via RenVM Bridge on our site like Curve does for deposits (can also accept RenBTC if user already has it), we give user yRenBTC, turn their BTC into RenBTC, Create a CDP, manage collateral and use our vaults to generate yield, which is used to buy RenBTC on the market and deliver returns to depositors as RenBTC. This allows a user to deposit BTC and increase their BTC stack while also generating significant buy pressure on the market for BTC.

2 Likes

So I think it’s obvious that I’m generally for BTC being added to the vaults– we’ve talked about this a good bit and as more BTC moves to Ethereum, it only makes sense that we would want to capture some of that value with yearn.

However, my only concern is that we may be trying to add too many vaults all at once, and the team can only do so much. I don’t think it’s a bad thing to add this to the list of vaults to implement, but I just want to discourage people from getting too pushy with the team if it isn’t implemented immediately– we’ve already got a proposal for delegated vaults for eight more Aave offerings, and a current YIP that will certainly pass for the sBTC Curve Pool LP token to be added as well.

So again– this is a great idea, and of course if people will deposit their renBTC this will be great– but I think for now, we should accept that Andre and team will acknowledge that this vault should be built and a strategy developed, but that it may need to wait a while as we get multi-sig and budgetary things moved forward.

8 Likes

We need bounties ASAP so other developers can build the vaults and the strategies. Andre and the team are humans, none can handle this amount of work.

5 Likes

Revenue maximization solves most problems and lets you sweep a lot more under the rug as we figure things out.

Edit: deleted :sweat_smile: