Proposal Details
Proposal #949
Proposal title
Deploy BTC/USDC to wide range Magma vault
Submit time
Deposit end time
Voting start time
Voting end time
Tally result
Proposal #949 description
This proposal would deploy idle Community Pool holdings via Magma to form a wide BTC/USDC position, minimizing potential losses through asset value fluctuations to the Osmosis treasury while utilizing idle liquidity to support Bitcoin trading in times of volatility.
This proposal would utilize 200k USDC and the equivalent of BTC if the rebalance proposal passes. If the rebalance proposal fails, this proposal will instead deploy existing BTC holdings in the community pool to the Magma position with the equivalent of USDC.
Current Deployments
Currently approximately 50% of Community Pool holdings are deployed in liquidity positions.
The largest BTC deployment is a static position in the range of 72,500 to 108,750 in a 0.1% pool. This static deployment was to provide initial trading liquidity as well as sticky liquidity in times of high volatility as well as earn revenue on idle USDC in the community pool and increase Bitcoin exposure, Proposal 860. This position has sometimes moved out of range with recent BTC highs and will be proposed to be withdrawn if this is sustained. The static position was initially deployed as 456k USDC and is currently valued at $476k.
The other BTC/USDC stable deployment have been monthly deposits into the Margined CLMM vault, which currently is valued at $460k. These adaptive deployments are to specifically facilitate volume for increased BTC trading by providing a narrow position that adapts with the price Proposal 882.
Proposed Deployment
This deposit aims to add to and improve the Static position deployment's purpose by depositing BTC and USDC to a conservative Magma vault. This allows the liquidity to be present to cater to sudden volatility spikes while also compounding fee revenue and repositioning as Bitcoin's valuation changes to remain in range.
About Magma
Magma Vaults are a fork of Charmfi Alpha Vaults, used to automatically manage liquidity positions in concentrated liquidity pools. They enable managers to operate vaults that create multiple positions within pools and automatically rebalance these positions when triggered by the manager. Magma was whitelisted for upload in Proposal 876 and currently has $2m in TVL deposited. This proposal would therefore increase this TVL under management by around 24%.
Deployment Plan
The vault for deposit is a +50%, -33% vault based on the 0.01% BTC/USDC pool.
A 10% performance fee is charged, consisting of a 5% admin fee by the vault manager and a 5% protocol fee by Magma.
After deposit, the ownership of the position will be returned to governance and any excess BTC and USDC returned to the community pool.
Performance Expectations
After 90 Days
- Value maintenance compared to holding BTC and USDC.
If this threshold is not met, governance should choose to unwind the position or redeploy the assets.
Forum Post: https://forum.osmosis.zone/t/deploy-btc-usdc-to-wide-range-magma-vault/3751