Bootstrapping ibBTC with a new Curve LP Vault (PLUS: Details On Our Limited-Time Gas Rebate)
BadgerDAO
Nov 23, 2021
BadgerDAO is going “all in” on Interest Bearing Bitcoin (ibBTC) as the flagship tokenized Bitcoin asset in DeFi. IbBTC combines deep liquidity with a base layer of yield powered by Badger’s growing stack of CVX, which allows us to support a sustainable BTC-on-BTC yield in today’s competitive DeFi landscape.
Even better, we’re paying you to migrate! Scroll down to the bottom of this article for details on Badger’s one-time gas rebate program.
Need an ibBTC Refresher?
Interest Bearing Bitcoin (ibBTC) is a tokenized (ERC-20) Bitcoin that exists on Ethereum and Arbitrum.
Each ibBTC is backed 1:1 by shares of the Curve ren Pool, which is itself made up of renBTC and WBTC, the top two tokenized Bitcoin assets by market cap.
The difference between ibBTC and other tokenized Bitcoins is that ibBTC has a native layer of yield that is generated by smart contracts that automatically sell a portion of Curve and Convex rewards into BTC and deposit them into the ibBTC contract.
Over time this yield builds up, increasing the amount of BTC assets backing each ibBTC token.
So how do we generate long term, sustainable yield for users?
Enter the ibBTC Curve LP Sett Vault...
The newest vault allows users to deposit Curve LP tokens from the Badger ibBTC Pool (Factory 60) and earn a combination of Badger rewards, bCVXCRV, bveCVX and Curve LP Fees.
Last week we kicked off Phase 1 of ibBTC Bootstrapping, aimed at generating enough liquidity to underpin a seamless user experience.
Since launch, the pool has grown to over $174m in balanced liquidity and leapt up the DeFI Pulse ratings to become the #5 largest form of tokenized Bitcoin on Ethereum.
With the acceleration of deep liquidity, the risk of slippage was significantly reduced and thus the team was able to fast-track a significant UI update for users, taking us one step closer to creating a 1-click to earn experience for BTC holders in DeFi.
The latest upgrade allows users to enter the new ibBTC Curve LP Vault without leaving the Badger app. By leveraging ZAPs, we’ve enabled users to deposit ibBTC, renBTC, wBTC and sBTC directly into the vault. No wrapping or interaction with the Curve UI is necessary.
Through this process, we've been able to remove a portion of the approval fees required when depositing LP tokens back into the Badger app.
We've also enabled an option to select your slippage tolerance and view the potential outcome of depositing one asset vs another. An unbalanced pool may offer slippage bonuses to incentivize depositing the underweight asset. These now appear in green at the time of deposit.
Check out the newest Video Tutorial on how to deposit into the new vault.
Following the successful rollout of Phase 1, we were able to accelerate our focus on delivering significant yield to new depositors in the vault.
As per approved BIP 75, a total of 94.8K BADGER emissions have been diverted to the new ibBTC Vault for the remainder of 2021 with an additional 39K added. These efforts will allow the vault to support significant yield even with high TVL.
To ensure depositors are receiving the best yield with Badger, 49% of all BADGER emissions are being emitted as flat vs boosted in the first week, meaning the low end APY will be higher and users won’t need to have a significant Badger Boost to get the best yield on their ibBTC. The percentage of boosted rewards will however decrease slightly every week thereafter.
This provides a great opportunity for users with low native balance to accumulate Badger in a short period of time thus increasing their overall Badger Boost.
In addition to Badger rewards, both CVX and CRV rewards are being distributed to the vault. Following the completion of the latest Curve gauge voting round, the ibBTC pool will be receiving 3.37% of all daily CRV emissions which is matched in CVX rewards by Convex.
The Badger Flywheel is starting to pick up speed!
- Better yields create more ibBTC, which
- Subsidizes vault deposits, which
- Generates additional cvxCRV for the treasury, which
- brings in more vote power…
And back around we go.
With continued vote weight influence we expect this yield to be sustainable at scale for Badger depositors moving forward.
What else is new with ibBTC?
We have now enabled the ability to mint ibBTC from all BTC Convex vault positions. In order to do this safely and efficiently, the team has implemented ZAP’s that effectively remove users from their current position, redeposit the funds into the renBTC/wBTC vault and mint ibBTC from there.
In addition, users can also mint ibBTC directly from wBTC and renBTC, but make sure to review slippage prior to transacting in order to determine whether it is more optimal to deposit those assets directly rather than minting.
Deposit Now For a Partial Gas Rebate
We get it: gas is too damn high.
That’s why Badger Governance has authorized two layers of gas rebates to defray the cost of moving your funds. The following rebates will be open for a two week period following the passage of BIP 75:
- 10 Badger to all addresses that mint ibBTC and then deposit ibBTC/sBTC LP into the app
- 5 Badger to the current users with non-native balance >$0 who deposit ibBTC/sBTC LP into the app
These gas rebates will be distributed through the Badger rewards interface on the app, so you can claim them alongside your other rewards.
Oh and don’t forget, mint fees have been removed and withdrawal fees have been lowered to 0.1%, giving Badgers complete flexibility to participate in the new vault.