Summary

This proposal seeks approval to start a collaboration with Threshold (the project behind TBTC). The outline of this collaboration is as follows:

• Threshold will allocate 4 TBTC and offer $22.5k in incentives to the new TBTC pool that Gearbox will list on the 27th of January 2025.
• Gearbox will convert the 3 WBTC currently in the treasury multisig to TBTC and deposit it into the TBTC pool, and allocate $22.5k GEAR tokens (3.4m at current prices) as incentives for the pool.
• Both parties will co-market this new pool as a way for BTC holders to earn passive yields - this will then create capacity for interested parties to run BTCfi points strategies (with Lombard, pumpBTC, eBTC, etc) by borrowing TBTC on Gearbox.
• Threshold treasury guild has already approved this collaboration effort.

Background

With the ongoing drama/concern about WBTC (e.g Coinbase delisting, concerns about fidelity), it is prudent for Gearbox to offer more than one option for earning BTC yield on Ethereum. Borrow demand for BTC denominated debt high - utilization sits at 85% currently in the WBTC pool. As such, the TBTC pool is being added shortly (already passed a DAO vote), and in order for this pool to be successful, seed liquidity and incentives are likely needed.

Proposal Details

This proposal outlines a collaborative effort between Gearbox and Threshold to launch and incentivize a TBTC pool, providing BTC holders with more options to earn yield while allowing Gearbox to somewhat mitigate dependency on WBTC. The specific steps and commitments from both parties are as follows:

*Threshold’s Commitment: *

• Allocate 4 TBTC to the new pool.
• Provide $22.5k in incentives to enhance pool activity and adoption.

*Gearbox’s Commitment: *

• Convert 3 WBTC from the Gearbox treasury multisig to TBTC and deposit it into the new pool as initial liquidity.
• Allocate $22.5k worth of GEAR tokens (approximately 3.4 million tokens at current market prices) as additional incentives for the pool.

*Joint Marketing Efforts: *

• Gearbox and Threshold will co-market the pool to highlight its benefits to BTC holders.
• The collaboration will emphasize the potential for passive yield generation and opportunities for BTCfi strategies leveraging TBTC on Gearbox.

The incentives above will be streamed over 6 months, at which point both projects can reevaluate and see if further support for the pool makes sense.

Rationale

Diversifying BTC Yield Options:

Amid ongoing concerns about WBTC (e.g., potential delisting by Coinbase and centralization risks), offering an alternative BTC yield solution increases resilience and user confidence in the Gearbox platform.

Meeting High Borrow Demand:

The WBTC pool utilization rate is currently at 85%, indicating strong demand for BTC-denominated debt. Adding a TBTC pool will address this demand while offering users more flexibility and reducing dependency on WBTC.

Voting Options

FOR: Approve the collaboration with Threshold, including the allocation of 3 WBTC to TBTC, $22.5k in GEAR incentives, and joint marketing efforts when the new TBTC pool is added.

AGAINST: Reject the conversion/allocation of treasury WBTC and reject the pool incentives.