TIP 54: tBTC & T, better together (Part 2)

TIP 54 is broken down into two governance cycles. The governance cycle for TIP 54 Part 1 was successful. This is a temp check snapshot for part 2. If passed, this proposal will move into the Token Holder DAO Governor Bravo instance.

This proposal will result in a Threshold Treasury Guild spend approval on the DAO's tBTC accrued from network fees for the following purpose.

Buyback and Make:

I propose that accrued tBTC fees be periodically single-side deposited into a T/tBTC pool, effectively buying back T with deposit amounts and timing determined at the discretion of the treasury guild.

As tBTC fees grow, more and more T is bought back and locked in an DAO-owned LP position. These periodic buybacks will take T off the market, deepen T and tBTC liquidity, and further tie the successes of tBTC and T.

The pros and cons of this model, called “buyback and make”, are well covered by Joel Monegro at Placeholder 16.

Creating a deep T/tBTC pool doesn’t only create stronger liquidity for the pair… it also becomes another revenue stream for the DAO. The Curve T/ETH pool 2 is projected to earn 46% APR next epoch, while the Balancer T/WETH pool earns 9.7-15.75%.

Full details of TIP 54 Part 2 are on the governance forum here -

https://forum.threshold.network/t/tip-54-tbtc-t-better-together/635