Too hard to get tzBTC, this will affect Liquid Baking

Today I’m trying to explore how to convert BTC to tzBTC, the experience makes me worried. First, I’m looking into Quipuswap, but the LP size is very small (< 2 tzBTC). Then I’m looking into tzbtc.io, there are 4 ways to get tzBTC, There is nothing about tzBTC mentioned at Bitcoin Suisse website. And the rest 3 gatekeeepers only provided online form or just support email addresses.

This whole situation makes me worried. Current only 357 tzBTC minted, according to my naive calculation, we need 3k+ tzBTC to join liquid baking in order to meet the 1/16 extra LB rewards as same as baking. Although, it’s understandable that liquid baking can get much higher APR than just baking, but a smooth tzBTC minting process is still much needed.

Can someone from TF provide some information about how to improve this situation please ?
@murbard @sophia Thoughts ?

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The equilibrium with baking rewards is a theoretical (and risk-free) target for the pool size based on economic incentives, not a requirement. 10% of that would still be far greater liquidity than has existed for tez so far.

I do agree there’s a bit of a bootstrapping question with the initial liquidity, but as you note the APY will initially be very high. This is the whole point: it incentivizes LPs to grow the pool. It need only attract any liquidity at all and then any users will be be able to swap tzBTC out of the CPMM.

I’m not sure if this will be a popular point to note, but it bears mentioning that liquidity providers and bakers are not necessarily the same set of users. They involve very different risks, knowledge areas, and operational involvement. Not everyone is in a position to be a liquidity provider and that’s okay. Everyone who owns tez will benefit from increased liquidity with a widely held asset like bitcoin.

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How about TF step up and put some resources to setup a usable tzBTC minting service ? Is this possible ? @murbard

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Without freely allowing new BTC converted into tzBTC, everyone have to compete with each other with very limited tzBTC supply, this will cause high price gap between tzBTC and BTC, and this only benefit those who can access the tzBTC minting process. It’s not a fair setup for Tezos community.

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This is true, I don’t think anyone disagree with this. However, without a smooth minting process, it slows down new BTC flowing into Tezos ecosystem, the current tzBTC minting business is so wrong, which in my opinion is not acceptable. The minting business only can be accessed by support email (and I sent email to all 4 gatekeepers, after 2 days, noone reply …). We definately need something better than this. It’s a shame we have so high quality in code and online upgrading, when everyone did so great and right with Granada, and then we all stucked at the door of tzBTC gatekeepers… this is so wrong …

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I think something like Youves would be the perfect place to implement minting of tzBTC

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You’re conflating two potential issues:

  1. Will the price pressure cause tzBTC to lose its peg? I don’t think so. There’s no reason the keyholders can’t mint more.

  2. Is the benefit to liquidity providers “unfair”? Maybe, but so what? All discussion about this seems to be from the perspective of would-be liquidity providers rather than traders. It’s not ideal if providing liquidity is initially restricted to HNW non-US citizens, but ultimately tez holders are paying these people for a service. The better question than whether the distribution of the subsidy is fair is whether you think paying it is worth it.

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The thing is if only keyholders can mint, it’s not open to broader community, this is not a ideal thing I think ? I send enquery email to all 4 gatekeepers, 3-4 days later, still no reply. This more like, we created an exchange but without deposit feature open to users.

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I did not say this is unfair for “benefit to liquidity provider”, let me clarify here, it’s a fair game for anyone to choose to be baker/delegator or liquidity provider, no problem here. The problem is at where the tzBTC originally comes from, let’s say potentially 2k BTC in Tezos community want to be minted, but since the poor minting process, they can not do it. How is this a good thing to Tezos ?

What if, for example, when Tezos did ICO/fundraiser, we could not directly send our BTC to fundraiser address, but only go through these tzBTC gatekeepers, and they won’t do their business properly at all ?
Will that make Tezos fundraiser a success?

Same question can be asked for tzBTC and the potential impact to the upcoming LB. It’s really not so hard to understand what’s the real problem here. I’m not agaist the KYC/AML of tzBTC, no problem for that either. But since our chain’s next major upgrade replies on tzBTC, asking for some improvement of the minting process should not be considered for asking too much, right ?

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Also I never said anything about US/no-US requirement, I myself am not US citizen either, I’m pointing out the very poor tzBTC minting process itself, like do business via emails, and even people are OK with it, based on my experience, they don’t even bother to give you any response, all of them.

I’m not here to chanllenge anyone, I’m raising aweness, and if possible ask for help from TF to improve this situation, can TF reach out to these gatekeepers to service Tezos community in some better way ? Or maybe everyone except me are very satisfied already ?

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I’m not the only unlucky guy it seems, is this really can’t be improved at all or not even worth any attention?

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Finally get a response from Bitcoin Suisse, but …

image

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The issue still hasn’t been addressed. Why is this a problem? Because those that can mint tzBTC will be the ones that are adding tzBTC to the pool. When we’ll they do this? Only once their is incentive ie arbitrage. So minters are going to be arb the pool and who looses out? The broader Tezos community.

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Interesting, did you reach out to tradedesk@bitcoinsuisse.com?

According to their presser, that’s the place to reach out to - Bitcoin Suisse Supports Launch of tzBTC | Bitcoin Suisse, but I’ve never done it before so I don’t really know.

This could simply be a support rep not aware of their role in tzBTC’s minting, or maybe they’ve discontinued minting, in which case that begs the question of what happened to their key, etc etc.

Thanks for doing some legwork here to go down the path to mint some tzBTC though, given Bitcoin Suisse’s prior involvement with the Tezos ICO you’d think they’d still be part of the ecosystem, but who knows.

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If we simply can’t have a way to mint tzBTC easily, what is the point? Only certain individuals will be able to participate in liquidity baking…

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Wow, this sounds like a potential disaster, and puts into a new light the criticisms of Granada liquidity baking.

@sophia gave some answers, but none of this addressed the fact that OP cannot get ANY of the supposed minters to fulfill their role. I just looked over on reddit and saw that @murbard is apparently reaching out to Bitcoin Suisse, but this issue (i.e., that multiple minters are not responding, except in the negative) seems bigger than just Bitcoin Suiise.

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Yes, I completely agree, the whole process should be as easily as creating an account/wallet in the minter’s website, send documentation for KYC/AML, once approved, a simple interface to exchange BTC to TZBTC and vice versa back and forward. I thought this process was already ready? I’m baffled to know that you actually have to send emails, like if we were in the beginnings of the internet.

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Quote from Woorton:

Hi everyone,

Thank you for your messages and interest on the exciting tzBTC project.

Due to regulatory issues we were not able to provide liquidity on tzBTC. Those issues have now been solved. Therefore we are now reaching every person or company that contacted us so you can expect an answer in the next hours/days. Here are a few things to know:

  1. Minimum trade/minting size is 1 BTC
  2. Fees apply due to the minting process
  3. Instruments available against tzBTC are BTC (of course), XTZ, USDC, USDT, USD, EUR, CHF, GBP, JPY, CAD, SGD, MXN, NZD, AUD, ETH, XRP, LTC, BCH, EOS, ADA, DOGE, XLM, LINK, UNI, BNB and DOT
  4. We provide liquidity for trades 24/7 via API, UI or chats on the previous instruments.
  5. Trading/minting with Woorton is subject to onboarding including an online KYC AML process.
  6. Every request that we receive on tzBTC will now be processed in the next 48h
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Remember when people were saying that tzBTC had “elevated prestige” as an argument for jamming this proposal in with important protocol updates. Just lol

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The feature itself is powerful and majority are excited for it to be implemented. Now the actual fun begins by proposing USDC in the future to replace tzBTC. With so much liquidity opened up for Tezos now, I can see a lot of positive economic activity happening.

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