OIP-35: Add WBTC to the Treasury

vrypan

abipup I like your approach. This way, Olympus could actually move the needle when a good ERC-20 BTC solution is available by providing liquidity, adoption, etc.

ElChapo

I'm all for BTC as collateral but not at the cost of centralization. No to wBTC, and I hope we don't go in that direction. Hopefully the smart money will tank the Snapshot vote.

Any good decentralized alternative would be a win to me.

gnostication

abipup

BTC (and WBTC, as a result of the vehicle's inherent connection to BTC) is certainly less volatile than ETH.

As a pure reserve or placeholder of value, I think BTC has ETH beat for this and other reasons (e.g., BTC is purely deflationary, with a defined limit to the maximum number whereas ETH does not appear to have that) is definitely worth accumulating.

I also like the idea of introducing OHM/wBTC LPs to the mix for improved liquidity and health of the market.

ETH still has tremendous value to the DAO thanks to its usefulness in conducting DAO operations. It just isn't such a good "placeholder of value".

I also like that this may be a hedge against inflation risks that we take on when we hold stablecoins based on national currencies (which all have grossly corrupted centrally controlled monetary policies).

liam3

oops I honestly agree, this is a centralised custodial asset.

Why are we doing this? Surely there are other ways or we could wait this out.

gnostication

oops

Well okay. You make great points.

I do want exposure to BTC. You're right though: it's best not to settle. We don't have to settle.

I do think you're missing a bit when you bring up the synthetic versions of BTC. While I appreciate Synthetix (and Mirror) assets, I think it's different than actually holding a bag of the asset. My understanding of both of those protocols is that you have to hold some form of collateral. That collateral would inherently be a different asset than pure BTC, right? And if that's the case, we would continue to hold the risk of the collateral asset, even if we are able hedge by holding the synthetic version of BTC and gain the benefits (or drawbacks) of its price action.

I want to distribute risk of price but also in the process balance the treasury more away from a limited culture of assets. Just holding USD stablecoins, LPs, ETH and OHM in the treasury seems riskier to me. Each of those assets have their benefits and drawbacks. I'd like to distribute risk by balancing the treasury more to compensate for those risks - not just hedge price action.

I have a mantra I like to spew to anyone not aware of the risks around homogeneity: strength in harmonious diversity. (I know. It's full of pomp. Sorry. I can be pedantic too.) You certainly can hedge, but I want true diversification for the treasury. This means more than just an ETH (or other) collateralized synthetic asset (since your still exposed to the risk of the collateral asset) and instead would be something fully backed by the real asset that also balances the more narrow set of assets currently in the treasury.

It doesn't have to be now. And just because I want it doesn't mean it's right. I trust in love always, and my trust in the DAO community is growing enough that I believe we will choose well together. Our strength hopefully will always be in our harmonious diversification.

oops

gnostication I agree, treasury diversification is a good thing. I want BTC some day. But I want the real thing.

Yeah, I have faith in the community too. Regardless of outcome, this is obviously a thoughtful process and the proposal doesn't commit a huge chunk of the treasury, which is sensible.

There's definitely nuance and extra risk/other sources of exposure associated with synthetic assets. What I'm saying is that I'm more comfortable with those risks than KYC/AML custodian risk. Above all, we don't NEED to take on any of these risks right now.

If we ever want to redeem wBTC for the real thing, somebody from the treasury would need to KYC/AML with Bitgo (now owned by Galaxy Digital). I've been told that we can get around that by using Ren when the time comes. In that case, why not just hold renBTC? Wasn't Ren rejected already b/c of lack of liquidity and lack of meaningful decentralization (they haven't achieved their whole road map, I guess)? Why would we choose not to hold it b/c liquidity but then rely on it later, when liquidity matters?

If we want wBTC, all we're getting is price exposure. It won't be easy to redeem, and I don't want a team member KYC/AMLing when the whole point of Olympus is to be a permissionless unit of account. If we really want price exposure to BTC, we can get it from permissionless sources.

wBTC is different than actually holding a bag of BTC.

Might as well think about ALL of the things that are different than holding a bag of BTC.

I don't think we need it right now in any case. We can wait for something better to come along.

Thanks for the input. This is what DAO stuff is all about, right?

cryptoHarvs

yes indeed ! the sooner the better before it pumps !

Zeta_Tauri

Considering Ren is now moving to a decentralised protocol by onboarding BadgerDAO as it's first Gerycore member (another 8 partners announced including Curve Finance, IDEX, Alamdea, University of Nicosia, etc) then would it not make sense to use renBTC as it is the most decentralised version of BTC on Ethereum (and on Solana, Arbitrum, BSC, Fantom, Polygon, Avalanche and soon Polkadot, Kusama and Moonriver).

I believe from reading on Twitter, Ren and OlympusDAO are now in contact. With the latest release of RenVM which enables Host to Host transfers and with RenVM transitioning to its on L1, I believe there is a lot of potentials for both protocols to work together. Pathing the way for OlymbusDAO to become a fluid multichain protocol.

abipup

oops to be fair, we get more than just price exposure with wBTC; that flavor of BTC has the most integrations across DeFi for depositing and trading.

Agreed that we definitely don't want to deal with KYC/AML should we choose to redeem our wBTC for the real thing. If we were to choose to do that, the route could be WBTC -> RenVM (not renBTC) -> BTC multisig. So we wouldn't hold any renBTC, just use their bridge to get to solid BTC.

Of course, we'd give up the productive use of BTC, but it's the "real thing" in that case.

In either case, I still believe the best course is to start with wBTC first: WBTC to be the most productive, and can vote later to move to BTC thru renVM if we need to.

gnostication

oops

I can't disagree with your fine points.

We'll get there, all in good time.

Olympus already shines.

joejoebiggums

Not a fan of wBTC. If there's not an ideal tokenized BTC solution available now, why doesn't OHM focus on solving that problem in-house? Seems like something the central bank of defi should be capable of doing, right? ohmBTC anyone?

gnostication

joejoebiggums

GREAT idea. Unfortunately something like that would require significant development and testing time/resources to implement - i.e., not just a money cost but also probably at minimum 3-6 months (on top of DAO core time drain).

Personally, I consider wBTC an immediate stopgap but not a permanent solution. We can always migrate away from it or transfer out to another better option. While I recognize the risks, I think they are minimal at this time (and overall exposure is low).

Why not add a proposal for such an idea and see what the appetite for a major project like that would be? I'd vote "yes" for that.

bone

There’s nothing wrong with OHM owning a centralized asset.

As long as OHM is decentralized, let’s vacuum ALL assets into the treasury.

puthinakattu

The governance voting for this has been completed. So what is the target date of this going live?

kombu_takana

A couple of questions as I don't think I saw a response for yet:
1. re: "We also expect that WBTC will open up multiple partnership opportunities for Olympus"

Can you elaborate here on what potential partnership opportunities this brings for Olympus? I don't quite understand the vision here.

2. re: "Currently, we’re sitting at around $107M risk free value, so the target would be 3.3% of that which is $3,531,000 worth of WBTC. As the RFV grows, so does our allocation in dollar terms."

Why is 3.3% of RFV appropriate here? Why not a smaller static value like 0.5% of the RFV snapshot at a point in time when the proposal is accepted and then in following proposals vote to increase this percentage accordingly to the goal 3.3% as we prove our hypothesis to the community first?

kombu_takana

kombu_takana oops lol, guess I'm a bit late here 😅

CryptoGang

Is there an API that we can use to communicate with cosmos-based chains? Why don't we try to integrate with Thorchain so we can hold actual BTC in our reserve? I understand why we need wrapped forms of crypto, but wouldn't it be better for the protocol to own the actual thing?

kombu_takana

CryptoGang we should look into it and report back

smartboy21

There should be a trustless way of getting Bitcoin on ethereum network. WBTC is wrapped asset guaranteed to be 1:1 backed by Bitcoin by an opague centralized company. By the same logic as OlympusDAO has not chosen to mint OHM against USDT or USDC, it should also refute from filling the treasury will assets governed by centralised entities.

Velikhan

Best store of value in the crypto space, definitely down

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