As part of the newly introduced Product Refinement initiative (Products Refinement Initiative) we here propose a health check of BTC++
BTC++ was the very first product ever discussed within the PieDAO community, and launched back as of early April 2020 as an innovative weighted allocation of different representations of Bitcoin on the Ethereum network.
Main motivation being the fact that, back then, an open race was on for bridging Bitcoin to the Ethereum Network, with a number of projects moving in that direction, with different tradeoffs in terms of security and decentralization, but with no clear winner (note that solutions like wBTC were still emerging back then). A more comprehensive background can be found here PIP 1- BTC++, BTC on Ethereum diversified
The intention is here to pragmatically put into perspective the cost/benefit of our products when assessing their performance and potential optimization. We’ve been condensing in the health-check below some stats on BTC++
Market Fit: #Holders of BTC++ are limited (sub 400) and only slightly increasing over the past 30 days. (Note that the recent spike in the number of unique addresses holding BTC++ was only a consequence to the airdrop proposed by Enso’s Vampire attacks, which anyhow only have negligible liquidity). Almost no Monthly trading volume is existing on the only pool available on Balancer.
Revenue: No fees accrued either by PieDAO and by LP holders.
Operational Costs: No Operational costs since no incentives, rebalancing or gas subsidization applied over the past months.
Liquidity Pools: Current BTC++/ETH pool on Balancer had approx $350k liquidity committed by 1 single Liquidity Provider accounting for approx 60% of the BTC++ TVL. The liquidity has been committed since the BTC++ establishment, with no further activity on that holding wallet.
Performance: Low TVL represents a tangible issue of BTC++, barely crossing the $550k mark (below 13 BTC++), down from the peak of >200 BTC++ scored back in mid July 2020, at the time when significant $BAL incentives were paid to BTC++ holders.
The first 2 holders of BTC++ cumulatively hold >80% of its supply.
Based on the above it seems that the majority of current holders have been there since the “farming” opportunity back in mid 2020, but contributing dust positions overall, denoting an overall lack of Market fit in this product.
The proposed solution would be to discontinue BTC++ from the PieDAO offering. Should this proposal be approved, BTC++ would be added to the deprecated PieDAO products page. Current BTC++ holders may either opt to keep their position or exit the pie through the option of Social Exit detailed below:
- PieDAO to share a multisig address for a certain period of time (~ 1 month), where all BTC++ holders could send in their BTC++
- PieDAO to redeem the liquidity collected and swap for ETH
- BTC++ holders to receive back an equivalent $value in ETH, after deducting a small 2% fee as partial compensation for the gas cost incurred.