Description

The Interlay - Astar XCM channel will be established and live in this upcoming week. This opens the door for bringing iBTC liquidity to the Astar network and expand the DeFi use cases for iBTC holders. Once there’s enough iBTC liquidity and all requirements are met, Interlay plans to introduce iBTC as a borrowing collateral asset on an Astar money market -currently exploring SiO2 and Starlay-. Interlay will take the first step by creating an iBTC pool on Arthswap, the DEX with highest TVL and asset availability on Astar network.

Decision to be made: which asset does the Interlay community want iBTC to be paired with on Arthswap?

As usual, there are a few factors to consider, including liquidity, impermanent loss risk, and diversification of integrations. Please keep in mind that in this particular case, the main goal is to create enough liquidity for liquidations to enable iBTC as collateral for borrowing on Astar money markets. The degree of liquidity in the pool will determine iBTC liquidation capacity which is the single biggest factor for money markets to calibrate the supply cap of iBTC as collateral.

You can find existing trading pairs on Arthswap here: https://dexscreener.com/astar/arthswap

This poll suggests listing one of the following pairs:

iBTC pair listing options

1) iBTC/WETH

Pros

• Creates a way to get Ethereum users into iBTC without bridging WBTC onto Astar
• High WETH liquidity already on ArthSwap (~$1.3m expecting more to come)
• WBTC/WETH among the most liquid pairs on Ethereum
• Most likely does not require many incentives (high correlation + high quality tokens = low IL risk, high trading volume on similar pairs on Ethereum = high fees)

Cons

• Bridging risk

2) iBTC/DOT

Pros

• Polkadot native pair
• Already good liquidity on ArthSwap (~$800k)
• Most likely does not require many incentives (high correlation + high quality tokens = low IL risk)

Cons

• Naturally competes with DOT staking alternatives (sDOT, LDOT, etc.)
• This iBTC/DOT option will be likely deployed on Parallel soon (already voted)

3) iBTC/celUSDC

Pros

• USD pairs usually have high trading volume, which means more fees and hence less incentives are required to have a competitive APR

Cons

• No correlation → High IL risk
• Bridging risk
• An iBTC/multiUSDC is available on Beamswap DEX