Zero-Based BTC Vault Strategy

I wanted to see what you guys thought about an easy-to-use automated yield strategy with Bitcoin, using Zero. (See the diagram below.)

Abstracting away the multiple steps involved, the user can have an easy-to-use place to start earning yield on their BTC.

The user only has to worry about their collateralization ratio health (I suggest defaulting to a 200% or 300% collateralization ratio).

Benefits to Sovryn

  • An added use-case for Zero - the current Sovryn userbase, who would not know what to do with a Zero-interest loan have an easy, 1-click way to use Zero, without needing to know how Zero works.
  • An additional way to lock DLLR/ZUSD into XUSD

Considerations

  • How would this compare to other BTC-yield strategies in terms of ROI?
  • The vault strategy will take a .5% fee going in and out of it, as well as a swap fee from XUSD<>RBTC, so the user must be aware that it could take a while for them to be in the green.
  • How high of a priority should this be, and what is the interest level from the Sovryn userbase?
  • How best to communicate/display to users when their collateralization ratio is getting close to liquidation? Does that add strain to the UX? Could there be a way to automatically exit the strategy if the ratio went below e.g. 120%?
  • Could we automate this so that BTC can enter the strategy via FastBTC, with some RBTC gas left over to withdraw?

8 Likes

I really enjoy how simple it is to use Zero already. Just very few clicks are needed to take a loan, add or remove collateral.

I think this proposed feature would be consistent with the “easy of use” aspect so it makes sense to include it. I can definitely see different yield strategies having such an automated feature for Zero.

However, i would not use it personally as Zero is already simple enough to use for me. I assume that the current sovryn users have a lot of knowledge and experience with such systems and would not be the appropriate target group. For new users, however, definitely interesting.

1 Like

I am skeptical of DLLR for the Mynt protocol. Since ZUSD is now in XUSD aggregator which is governed by the BabelFish Community. I really dont think it makes much sense to also have a ZUSD in DLLR aggregator. We have loads of populuar stablecoins and adding DLLR creates more complexity/friction. Who would govern the ZUSD stablecoin, the SOV stakers, Fish Stakers or Mynt Stakers (This could create division and infighting). I think ZUSD is already a super stablecoin with the greatest transparency. No need to reinvent the wheel when its clearly working really well.

My point is I think BTC vault strategy is a good idea with ZUSD alone or XUSD. Lets keep things simple. Trying to explain that ZUSD is managed by SOV governance, Mynt governance and Fish governance to a new user will not be fun for CM/Support team.

4 Likes

ZUSD is only governed by SOV. As specified in the Mynt SIP, Sovryn Mynt is also governed by SOV.

1 Like

What about $MYNT ? What is the purpose of the token if $SOV is governing it?

1 Like