CurveBTC+: Usable and Interest-bearing BTC for Curve LP
🌈Calling all Curve BTC LPs, you won’t want to miss this one
We are thrilled to announce our first composite plus asset on Ethereum, CurveBTC+, a usable and interest-bearing ERC20 BTC for Curve LP.
What is CurveBTC+?
The user story for Curve BTC LPs is often two steps:
- Deposits ERC20 BTCs, e.g. WBTC, renBTC, sBTC, into Curve pools;
- Deposits the obtained Curve LP tokens, e.g. renCrv, sbtcCrv, into farming protocols, e.g. Yearn, Harvest, Badger, for additional yield.
That’s where the journey of lots of BTCs ends in Ethereum. It is clear that they have low capital efficiency especially in Curve as most bitcoins are sitting idle.
CurveBTC+ aims to solve the problem with a step 3: Mints CurveBTC+ with Curve vault share tokens. Simply put, CurveBTC+ is a synthetic ERC20 BTC backed by Curve BTC vault share tokens. CurveBTC+ could fully unlock the value of Curve BTC LP since:
- CurveBTC+ is interest-bearing and provides global interest to all holders. Users continue to accrue yields from Curve and any yield farming protocols when they use CurveBTC+ in other applications;
- CurveBTC+ maintains a stable peg with BTC, which means 1 CurveBTC+ can always redeem into 1 BTC. This makes CurveBTC+ an ideal collateral in lending and margin trading.
Why CurveBTC+?
Before CurveBTC+, no ERC20 BTC assets can be both interest-bearing and value peg at the same time. This makes CurveBTC+ unique compared to other ERC20 BTCs in the market.
Transparent and Real APY
It’s often a headache for Curve BTC LPs to calculate and verify their APY from Curve and from Yield Farming protocols. They will either have to trust the numbers provided by the protocol DApp, or write complicated scripts to cross check the math.
This is no longer a problem if you have CurveBTC+ since its APY is completely transparent: you only need to monitor your CurveBTC+ balance to see your returns! In other word, your CurveBTC+ balance is the true BTC value of your LP position, and it will grow gradually as LP position value increases.
You can easily verify your APY between two points in time by checking balances at these two timestamp, and you could always get that amount of BTC back since CurveBTC+ is 1:1 peg with BTC.
Usable as Collateral
Most interest-bearing BTC assets in Ethereum cannot be used as collateral in lending and margin trading protocols because it is difficult to fairly price them. Take mStable’s interest-bearing mBTC(imBTC) as an example. imBTC’s value depends the following properties:
- BTC price
- mBTC underlying swap’s trading volume
- mBTC basket investment performance in Compound/Aave
Therefore, it is difficult to price imBTC indirectly based on its performance, or directly with a swap pair due to imBTC’s low liquidity. Such problems applies to Badger and DefiDollar’s ibBTC as well.
CurveBTC+ solves the problem by maintaining its peg to BTC. This means Curve BTC LP can use CurveBTC+ as collateral in lending and margin trading platforms to increase the capital efficiency of their BTC LP position. What’s more exciting is that they could achieve this without losing their yield from Curve and yield farming protocols! To learn more about how it works, please refer to this article.
How to Mint CurveBTC+
As stated above, CurveBTC+ can be minted with Curve BTC vault tokens. The first Yield Farming protocol we support is Badger. We choose Badger since Badger is a community and DAO dedicated to building products and infrastructure to bring Bitcoin to DeFi. Badger’s vault product, named Sett, provides competitive yields for Curve LPs in the market.
To mint CurveBTC+, simply follow the CurveBTC+ participation guide.
Resources:
- ACoconut Governance Portal
- Introducing ACoconut v2
- ACoconut: The First Cross-Chain BTC Yield Aggregator
- Introducing ACoconut Tokenomics v2
- Join Telegram → https://t.me/acbtc_community
- Join Discord → https://discord.com/invite/mvANFYe
About ACoconut
ACoconut is a BTC DeFi protocol suite designed to enable frictionless movement of BTC liquidity between decentralized systems. The ACoconut protocol suite consists of BTC+ and acBTC, powered by NUTS Finance.
About NUTS Finance
NUTS Finance is a blockchain development DAO focuses on building secure, composable and open source technology to empower financial applications on the blockchain. Our team is composed of experienced developers, financiers and serial entrepreneurs.
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