TIP 51: Coverage Pool Allocation

TIP 51: Coverage Pool Allocation

Vote type:

Token Holder Governor Bravo Temp Check

Overview:

This is a proposal to provide more insurance to tBTC users in the form of allocating more Threshold DAO resources to the coverage of tBTC. Responsible risk management on behalf of the DAO is critical for tBTC users as the network continues to scale.

Currently, tBTC is backstopped by a single asset T-only coverage pool. Strong steps toward improving protocol risk management are achieved by the DAO committing more assets to this pool.

This proposal is an extension of TIP 43- Coverage Pool Migration. The intention is to strike a better initial balance between early tBTC coverage and the opportunity for the DAO to maximize yield by leveraging internal assets elsewhere across the DeFi ecosystem.

The proposal is not the end state for Threshold DAO tBTC risk management. The Threshold DAO can elect to expand tBTC coverage into multiple assets by deploying a new, fully incentivized multi asset coverage pool. This would allow for coverage outside of just T as a single asset which is beneficial for risk management. However, any expansion is out of scope of this proposal.

The full proposal is available on Threshold forums:

https://forum.threshold.network/t/tip-51-coverage-pool-allocation/610