Summary
The objective of this proposal is to migrate the axlWBTC feed from the currently used BTC/USD Pyth feed to the recently added WBTC/USD Pyth feed.
Motivation
The motivation is simple. The asset that’s listed on Mars is Axelar Bridged WBTC (not BTC). As such, it’s more precise to use the WBTC/USD than the BTC/USD feed from Pyth. Furthermore, this reduces the risk surface for Mars related to dislocations to the underlying BTC represented by axlWBTC. While previously there were two sources from which this dislocation could emerge from, with this migration there will only remain one. These sources are:
- BitGo: WBTC is a representation of BTC in custody by BitGo. If anything were to happen to the underlying BTC, WBTC’s price would likely deviate from the price of BTC. Given that Mars currently uses the BTC/USD it wouldn’t be able to capture this eventuality. The new WBTC/USD feed, however, would.
- Axelar: axlWBTC is a representation of WBTC locked in the Axelar bridge. As such, if anything were to happen to the locked BTC, the price of axlWBTC could deviate from the price of WBTC. As Pyth currently supports WBTC and not axlWBTC, the protocol would still be open to this potential risk.
Risks
As stated above, we believe the proposed migration reduces the risk surface Mars is currently exposed to. However, Mars would still be exposed to potential issues at the Axelar bridge level.
Additionally, it’s worth noting that WBTC is significantly less liquid than BTC. As such, the WBTC feed could be more easily manipulated than the BTC feed. Having said that, at the current deposit cap levels, we don’t believe this to be a material risk for the protocol.
Implementation
This is a signaling proposal, not an executable proposal.
The Mars smart contracts on the Osmosis chain are currently controlled by the Builder Multisig address. If this proposal passes, the builders will utilize their multisig to make the necessary parameter changes.
Copyright
Copyright and related rights waived via CC0.
Disclaimers/Disclosures
This proposal is being made by Delphi Labs Ltd., a British Virgin Islands limited company. Delphi Labs engages in incubation, investment, research and development relevant to multiple ecosystems and protocols, including the Mars Protocol. Delphi Labs and certain of its service providers and equity holders own MARS tokens and have financial interests related to this proposal. Additionally, Delphi Labs is one of several entities associated with one another under the “Delphi Digital” brand. Delphi Digital’s associated entities and/or equityholders or service providers of such entities may hold MARS and may have financial interests related to this proposal. All such entities, service providers, equity holders and other related persons may also have financial interests in complementary or competing projects or ecosystems, entities or tokens, including Osmosis/OSMO and axlWBTC. These statements are intended to disclose relevant facts and to help identify potential conflicts of interest, and should not be misconstrued as a complete description of all relevant interests or conflicts of interests; nor should they be construed as a recommendation to purchase or acquire any token or security.
This proposal is also subject to and qualified by the Mars Disclaimers/Disclosures. Delphi Labs may lack access to all relevant facts or may have failed to give appropriate weighting to available facts. Delphi Labs is not making any representation, warranty or guarantee regarding the accuracy or completeness of the statements herein, and Delphi Labs shall have no liability in the event of losses or damages ensuing from approval or rejection or other handling of the proposal. Each user and voter should undertake their own research and make their own independent interpretation and analysis of all relevant facts and issues to arrive at their own personal determinations of how to vote on the proposal.
