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The liquidity profile and peg of wBTC is exponentially stronger than people realize
Let's talk about the liquidity pathways of wBTC, prop trading and why Proposal 014 should pass https://twitter.com/rleshner/status/1280305562253529088
Let's talk about the liquidity pathways of wBTC, prop trading and why Proposal 014 should pass https://twitter.com/rleshner/status/1280305562253529088
@gauntletnetwork & @rleshner made several decent points about the liquidity profile of wBTC as evidenced by (1) trading volume and (2) orderbook depth
While these are typically good measures of liquidity for assets, they are actually misleading for wBTC https://twitter.com/gauntletnetwork/status/1280311879097868290
While these are typically good measures of liquidity for assets, they are actually misleading for wBTC https://twitter.com/gauntletnetwork/status/1280311879097868290
Trading Volume
CMC is cited for trading volume of wBTC. CMC excludes @CurveFinance volume which @coingecko includes. CoinGecko shows wBTC volume as typically 2-3x higher https://twitter.com/gauntletnetwork/status/1280311879097868290
CMC is cited for trading volume of wBTC. CMC excludes @CurveFinance volume which @coingecko includes. CoinGecko shows wBTC volume as typically 2-3x higher https://twitter.com/gauntletnetwork/status/1280311879097868290
Orderbook Depth
Looking at orderbook tells you the amount of volume you can trade with X% slippage and this is a common measure of liquidity. The thing is, most of wBTC liquidity exists in @CurveFinance - an exchange without orderbooks https://twitter.com/rleshner/status/1280305566204612609
Looking at orderbook tells you the amount of volume you can trade with X% slippage and this is a common measure of liquidity. The thing is, most of wBTC liquidity exists in @CurveFinance - an exchange without orderbooks https://twitter.com/rleshner/status/1280305566204612609
Curve Liquidity
In Curve, there is $23M of sBTC/renBTC/wBTC liquidity. Curve BTC pools have a liquidity amplification of 100, meaning these curve pools offer the liquidity equivalent of $2.3B of sBTC/renBTC/wBTC in Uniswap.
In Curve, there is $23M of sBTC/renBTC/wBTC liquidity. Curve BTC pools have a liquidity amplification of 100, meaning these curve pools offer the liquidity equivalent of $2.3B of sBTC/renBTC/wBTC in Uniswap.
RenBTC and sBTC aren't liquid in typical CLOB exchanges either, but for those familiar with @synthetix_io, sBTC is incredibly liquid. You could easily convert millions of wBTC to USDC/USDT at market price with minimal slippage+fees using @synthetix_io and @CurveFinance*
RenBTC on the other hand can be exchanged 1:1 for real BTC in an hour with a 0.1% fee - much faster than the wBTC redemption process
wBTC benefits from the liquidity of both sBTC and renBTC
wBTC benefits from the liquidity of both sBTC and renBTC
Also, the effect of wBTC mint/burn friction is overstated.
The mint/burn process for USDT is arguably even more friction-heavy given banking requirements
But USDT always stays in a tight peg even during market volatility. https://twitter.com/gauntletnetwork/status/1280311895413620736
The mint/burn process for USDT is arguably even more friction-heavy given banking requirements
But USDT always stays in a tight peg even during market volatility. https://twitter.com/gauntletnetwork/status/1280311895413620736
This is b/c there are arbers/MMs that support the peg by providing liquidity at higher deviations and wait for mean reversion. They don't actually mint/burn
A lot of this "potential energy" of liquidity isn't expressed on OBs until its needed
Thin Binance USDT/USDC OB shown
A lot of this "potential energy" of liquidity isn't expressed on OBs until its needed
Thin Binance USDT/USDC OB shown
There are plenty of prop firms that would be happy to hold wBTC inventory for a short duration as they can inexpensively hedge it until they realize the basis differential
Buying BTC at a 8% discount is a great trade in any market condition
H/T @zhusu https://twitter.com/zhusu/status/1280322603446497283
Buying BTC at a 8% discount is a great trade in any market condition
H/T @zhusu https://twitter.com/zhusu/status/1280322603446497283
