BIP 100 allocated the unclaimed ibBTC rewards to bootstrap yield for eBTC.
These incentives are split between minting incentives via Merkl (TCD 62) and Curve eBTC/tBTC liquidity rewards, which are co-incentivized with Threshold.
Now that these incentives are about to be depleted (there’s about 21 $k left at current prices), we need to think of a better way to wind them down.
My proposal is to:
- Cancel the Merkl minting incentives immediately.
- Keep the liquidity incentives at their current level until they run out.
- After the incentives run out, keep incentivizing liquidity together with Threshold at a rate that is supported by eBTC’s user generated revenue (currently about $25k/y)
Steps (1) and (2), along with the Treasury’s eBTC positions (1 & 2), allow users who do not have eBTC at their disposal to close their positions smoothly in case they don’t want to keep them open without minting incentives.
Step (3) puts eBTC into a stable state, where the protocol functions as a closed system, paying for its own liquidity with the revenue it generates.
