This is a proposal for creating a new liquidity market to support cBTC token for lending and borrowing on the Liqwid protocol, but not as collateral.
Project and Token Overview
cBTC will be brought through the anetaBTC protocol on Cardano. More information can be found at anetabtc.io.
cBTC Market Reasoning
cBTC can be easily redeemed for BTC, which is the most liquid cryptocurrency asset and the predominant asset listed on the largest exchanges in the world.
It means that if the cBTC tokens would be sold on a DEX or any CEX, following a bridge back from Cardano to Bitcoin, we are confident that liquidators would find enough liquidity and the slippage would be low because of these arbitrageurs.
cBTC is relatively new token that is still in its infancy. The anetaBTC protocol has been formally audited, both externally and internally, has open-sourced contracts, and has successfully seen 20 BTC go through the protocol with 0 security issues.
The bridge is currently accessible here app.anetabtc.io.
Suggested cBTC Market Parameters
The proposed cBTC interest rate model is the same interest rate model as iUSD and USDC.
Interest rate market parameters:
- BaseRate: 2.00%
- RateNormal: 5.00%
- RateJump: 400%
- Kink: 65.00%
Interest rate for cBTC defined by utilization rate.
The interest divided as follows:
- Suppliers: 80.00%
- Reserve Factor: 10.00%
- DAO Factor: 0.00%
- LQ stakers: 10.00%
cBTC is not proposed as collateral asset, same as iUSD or USDC.
Specifications Following this temperature check, the we propose the core team works on cBTC preparation work including: 1) configuring the oracle price feed, 2) completing the off-chain updates and 3) testing the market parameters (incl. interest rate model).
We recommend the adoption of this proposal and to add $cBTC token for supplying and borrowing on Liqwid with the proposed market parameters. We note that $cBTC will not be accepted as collateral.
- Yes, I support the addition of cBTC
- No, I do not support the addition of cBTC