Interlay
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Interlay

KBTC Multi-Collateral Support: Proposals for USDC and KINT

KBTC has been live on Kintsugi for 3 weeks and we are seeing great demand from the community for decentralized Bitcoin on Kusama.

  • $1 million worth of KBTC minted (or in the process of being minted)
  • Secured by $2.3 million worth of KSM collateral
  • Maintained by 40+ vaults

Two first integrations (Solarbeam kBTC/wBTC stablepool, Karura aUSD/kBTC pool) are live and more are coming over the next weeks.

Next step: Multi-Collateral KBTC

As of today two new discussions have been added in the Governance forum, proposing to:

At the current stage of kBTC’s expansion Vaults are limited to using KSM as collateral, however, one of kBTC’s main goals is to strive for stability and to diversify the number of tokens used as collateral.

KINT as KBTC Collateral

KINT is the quickest and easiest way to help provide that sought-after stability and collateral diversification everyone wants. If you’re in our discord channel, then you’ll be no stranger to the requests of Vault operators for KINT to be onboarded as collateral!

KINT’s suggested parameter configuration is as follows:

  • Initial collateral ceiling: 1 Million USD equivalent
  • Secure collateral threshold: 700%
  • Premium redeem threshold: 600%
  • Liquidation threshold: 500%

Read more about collateral thresholds here

See the discussion regarding the proposal here

USDC as KBTC Collateral

USDC is the USD stable coin that can be onboarded the fastest. Another benefit is the high amount of USDC liquidity on Moonriver which sits at $4.5 million.

USDC can be imported from Moonriver via XCM, which in-turn imports USDC from other DeFi platforms such as Ethereum via the Multichain bridge.

USDC’s Parameter configuration is as follows:

  • Initial collateral ceiling: 1 Million USD equivalent
  • Secure collateral threshold: 160%
  • Premium redeem threshold: 140%
  • Liquidation threshold: 120%

See the discussion regarding the proposal here

What defines these thresholds?

We run a series of modeling simulations for every single new collateral type that’s added.

Check out the open-source Python code that we used to analyze new collateral assets and pick these thresholds here!

Why is this all needed?

There is high kBTC demand on Kusama, with capacity maxing out very quickly. KSM, while the most liquid asset on Kusama, has seen price fluctuations of its own and is hence considered risky by some Vault operators. Diversifying the collateral set not only helps to offer better security to kBTC users but also de-risks Vault positions — making Vault operation more attractive.

Call for Participation: Discuss and Vote!

Kintsugi is a fully decentralized network and only the community as a whole can make such decisions.

Join the discussion and cast your vote:

About Interlay

We envision a future where blockchains seamlessly connect and interact: anyone can use any digital asset on any blockchain, trustless and without limitations. We work with Bitcoin, Ethereum, Polkadot, Cosmos, and others to expand interoperability, capital efficiency, and openness.

Our flagship product is interBTC — Bitcoin on any blockchain. A 1:1 Bitcoin-backed asset, fully collateralized, interoperable, and censorship-resistant, realizing the true free nature of BTC and decentralized finance.

Follow our Twitter, Telegram, and Discord to keep up to date with daily updates from the team.

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