[CurveLP-renBTC-WBTC] MIP6 Collateral Onboarding Application

[CurveLP-renBTC-WBTC] MIP6 Collateral Onboarding Application for renbtcCRV LP Token

  1. Who is the interested party for this collateral application?

@monet-supply

  1. Provide a brief high-level overview of the project, with a focus on the applying collateral token.

Curve finance is a decentralized exchange platform focusing on swaps between like assets (stablecoins, wrapped assets, etc). The Curve AMM formula provides amplified liquidity around 1:1 ratio, which allows for larger trades with low slippage and better capital efficiency.

  1. Provide a brief history of the project.

Curve launched in the beginning of 2020 with USD stablecoin pools. Curve began supporting BTC as well once more wrapped options emerged in mid 2020. The first Bitcoin pool was the renBTC Curve pool, which consists of Ren Project’s renBTC and Bitgo’s Wrapped BTC.

Ren launched renBTC in mid 2020. It uses a semi decentralized network of nodes to act as custodian for BTC held on Ethereum, and holders can create or redeem renBTC against native BTC with no KYC or special permissions required. Currently, a centralized set of nodes (the greycore) backstop system security, which makes renBTC subject to significant custody and centralization risks.

WBTC is the longest standing Bitcoin token on Ethereum. Technically, WBTC is governed by a consortium of defi organizations and protocols, but Bitgo is the only approved custodian for funds and the system is fairly centralized as a result. WBTC has been trading on Ethereum since 2019, but total supply and liquidity took off in the middle of 2020 after MakerDAO onboarded WBTC as a collateral asset.

  1. Link the whitepaper, documentation portals, and source code for the system(s) that interact with the proposed collateral, and all relevant Ethereum addresses. If the system is complex, schematic(s) are especially appreciated.

Curve whitepaper: https://www.curve.fi/stableswap-paper.pdf

Documentation: https://resources.curve.fi/ Curve.fi

Website:

Curve Source Code: GitHub - curvefi/curve-contract: Vyper contracts used in Curve.fi exchange pools.

CurveLP-renBTC-WBTC token contract: https://etherscan.io/token/0x49849C98ae39Fff122806C06791Fa73784FB3675

renBTC collateral application: [renBTC] MIP6 Collateral Application

WBTC onboarding post: [WBTC] - WBTC Collateral Request For Comment

  1. Link any available audits of the project. Both procedural and smart contract focused audits.

Audits: Curve.fi

  1. Link to any active communities relating to your project.

Twitter: https://twitter.com/CurveFinance

Telegram: Telegram: Contact @curvefi Telegram: Contact @curveficn

Discord: https://discord.gg/9uEHakc

  1. How is the applying collateral type currently used?

CurveLP-renBTC-WBTC is a source of liquidity for trading between renBTC and WBTC. Users can deposit one or both assets to the pool in exchange for LP tokens, and earn a portion of the fees charged on trades. LP tokens can also be staked in Curve’s gauge contracts to earn inflationary CRV token rewards.

  1. Does one organization bear legal responsibility for the collateral? What jurisdiction does that organization reside in?

Curve LP tokens are permissionless assets, no party bears legal responsibility for the asset.

WBTC is custodied by Bitgo, which operates in the US. RenBTC is semi-decentralized, but the core team based in Singapore has control over system operations. Ren team was recently absorbed/acquired by Alameda Research (FTX affiliate).

  1. Where does exchange for the asset occur?

CurveLP-renBTC-WBTC can be exchanged for underlying assets (renBTC and WBTC) directly via the Curve finance contracts. renBTC and WBTC are traded on a wide variety of centralized and decentralized exchanges. WBTC can be minted or redeemed for native BTC via a network of approved merchant entities (KYC is required). RenBTC can be minted and redeemed via the Ren protocol with no KYC required.

  1. (Optional) Has your project obtained any legal opinions or memoranda regarding the regulatory standing of the token or an explanation of the same from the perspective of any jurisdiction? If so, those materials should be provided for community review.

n/a

  1. (Optional) Describe whether there are any regulatory registrations for the token and provide related documentation (including an explanation of any past or existing interactions with any regulatory authorities, regardless of jurisdiction), if applicable.

n/a

  1. (Optional) List any possible oracle data sources for the proposed Collateral type.

n/a

  1. (Optional) List any parties interested in taking part in liquidations for the proposed Collateral type.

n/a

Notes: Curve LPs can be staked in gauges to earn CRV token rewards. Maker would need to design a way to stake LP tokens to capture this yield. The Curve system also allows LPs to boost earnings by locking CRV tokens. It may be advantageous for Maker to stake CRV in order to boost vault holder returns, but this would require approval from Curve governance to whitelist a Maker governance contract to lock CRV tokens.

Disclosure: I have financial interest in tokens mentioned. This collateral application is for informational purposes only, and does not constitute advice of any kind.

Copyright and related rights waived via CC0.

9 Likes

Interesting. What made you prioritize this LP in particular?

3 Likes

Mainly because it’s composted of assets we already accept. All of the Curve USD LPs have some constituent assets that we either don’t yet accept (eg cUSDC and cDAI) or have USDT where we probably want to minimize exposure.

5 Likes

totally make sense to me and the crvrenwbtc pool currently have LP value worth more than $850M which seems good enough for a small starting debt ceiling like $1M to give it a try

2 Likes

Agree, and welcome btw!

1 Like