Greetings Verse Community,
We are thrilled to bring you another exciting proposal as we continue to shape the future of Bitcoin.com’s Verse Ecosystem.
Verse Staking V1
In April 2023, we launched the Verse Staking Program which rewarded participants with VERSE for staking their VERSE on Ethereum.
Verse Staking V2
In 2024, we introduced the next iteration of the program — Stake VERSE, Earn BTC — which rewarded participants with tBTC for staking their VERSE. The Verse Staking Program was also expanded to Polygon. Bitcoin.com attracts a large amount of users who want BTC, due to our domain. By aligning the Verse Ecosystem with more Bitcoin opportunities, we attracted users who are interested in holding and earning BTC, into the Bitcoin.com and Verse Ecosystem.
To date, we’ve achieved:
- $755k+ in Total Value Locked (TVL) with 870+ participants across Ethereum and Polygon
- $180k+ in new TVL per month (last 3 months)
- 13% month-over-month user growth (last 3 months)
- USD $82,352 worth of VERSE rewards distributed in the Verse Staking Program across Ethereum and Polygon.
While the “Stake Verse Earn BTC” is an attractive value proposition as evident from the high participation rate, the liquidity locked in v2 of the Verse Staking Program is not capital efficient. The liquidity is not used to support trades on any of the VERSE routes, nor liquidity for bridging across chains.
Proposal: Verse Staking V3
As in V2, Verse Staking V3 will continue to be an opportunity for users to Stake VERSE to earn BTC, to maintain alignment of the Verse Ecosystem with Bitcoin opportunities. The underlying staking contract will be upgraded for improved liquidity and capital efficiency.
In Verse Staking V3:
- users would deposit VERSE to participate
- a proportion of the deposit will be swapped to tBTC
- both VERSE and tBTC will be deposited into a 80/20 VERSE-tBTC Balancer Pool
- the associated LP tokens will deposited into the Verse Staking V3 contract
- the user would earn variable APY on the staked LP tokens
- if the user withdraws from Verse Staking V3:
- VERSE and tBTC will be redeemed using the LP tokens, which includes any rewards earned from providing liquidity on the VERSE-tBTC Balancer Pool
- tBTC will be swapped to VERSE
- VERSE will be sent to the user, along with any variable APY earned for the duration of the stake.
On Ethereum:
- Launch an 80/20 VERSE-tBTC Balancer V3 Pool. Learn more about Balancer Pools here.
- Create a seamless upgrade contract to migrate Verse Staking V2 positions into Verse Staking V3 positions. For users who migrate via this contract, a proportion of the position will be swapped into tBTC and deposited into the 80/20 VERSE-tBTC Balancer V3 Pool above
- Halt rewards on the Verse Staking V2 Program on Ethereum
- Double voting power (2x) for V3 participants in Verse Community Proposals.
On Polygon:
- Create an 80/20 VERSE-tBTC Balancer V2 Pool. Learn more about Balancer Pools here.a. Note: Balancer V3 is not available on Polygon at the time of writing. It is expected to be available within 2025. As such, we will use Balancer V2 in the interim.
- Create a seamless upgrade contract to migrate Verse Staking V2 positions into Verse Staking V3 positions. For users who migrate via this contract, a proportion of the position will be swapped into tBTC and deposited into the 80/20 VERSE-tBTC Balancer V2 Pool above
- Halt rewards on the Verse Staking V2 Program on Polygon
- Double voting power (2x) for V3 participants in Verse Community Proposals.
Note:
- Farming rewards on Ethereum will still continue.
Pros
- Capital-efficient use of staked funds:
- Based on the current TVL of $700k+ in Verse Staking V2, this amount of liquidity in a VERSE-tBTC pool would make it a very healthy pool with enough depth to support trades. This would encourage more traders on the pool.
- Additional Rewards:
- Participants in Verse Staking V3 would earn additional rewards on their staked liquidity as LP providers, proportional to the swap volume that takes place on the VERSE-tBTC liquidity pool.
- Reduction in freeloaders:
- Verse Staking V3 would no longer reward users for simply depositing idle funds for free money. Everyone’s participation would now contribute to the liquidity depth in the VERSE-tBTC pool.
- Strengthened governance through increased voting power:
- We recognize the commitment to the Verse Ecosystem from participants in Verse Staking V3, and they would have a greater voice in our community proposals.
- Balancer Hooks would provide us a way to supercharge the experience for Verse Staking V3 participations. We will explore levering hooks for use cases such as:
- Dynamic Fee Adjustments
- Adjusting trading fees based on based on market conditions, trade size, or for holding VERSE, Verse Voyagers, or related Verse Ecosystem tokens eg. POAPs.
- Participation Rewards
- Distribute VERSE or NFTs for swapping over a specified volume eg. 10 Verse Scratchers for swapping over $150 of volume.
- Risk Management
- Implement circuit breakers to pause trading during abnormal market conditions.
- Governance and Voting
- Enable token-based governance mechanisms where liquidity providers can vote on pool configurations or protocol changes.
- Advanced Liquidity Provider Incentives
- Calculate and distribute dynamic yield boosts based on time-weighted contributions or other engagement metrics.
Cons
- Existing participants in Verse Staking V2 may have difficulty migrating, leading to a loss of participation in Verse Staking V3. This is mitigated by the upgrade contract which would facilitate migration.
- Prospective users of Verse Staking V2 may have difficulty participating:
- We will explore wrapper contracts to simplify swapping and depositing the correct amounts of VERSE/tBTC, in addition to enabling gas-less transactions for users without gas.
- As the underlying staked asset is a LP token, participants in Verse Staking V3 are exposed to Impermanent Loss (IL), which occurs when the value of assets provided to a liquidity pool changes relative to simply holding them, leading to potential losses for liquidity providers when prices diverge significantly. Learn more about IL here. However, IL is less for an 80/20 Balancer pool compared to a traditional 50/50 pool because the pool is weighted more heavily toward one asset (80%) rather than requiring equal exposure. This reduces the need for frequent rebalancing as prices fluctuate, minimizing the divergence between the pool’s asset ratio and market prices. As a result, price changes have a smaller impact on the pool’s value, lowering the extent of IL. Read more about how Balancer reduces IL here.
Note:
- Verse Staking V3 rewards may change from time to time. Currently it’s tBTC at 20%+ APY but this will change.
Option 1: Yes, proceed
Option 2: No, do not proceed
Each option brings its own set of strengths and considerations. It’s an exciting opportunity to shape the relevance of the Verse Ecosystem, and we look forward to the community’s active participation in making this decision.
Now, it’s up to you, the Verse community, to decide.
Voting Period
The voting period for this proposal commenced on 8 February 2025 and will conclude on 22 February 2025. During this time, we encourage all members of the Verse community to express their preferences and actively contribute to this significant decision.
Don’t have VERSE yet?
You need VERSE to vote on Verse Proposals. You can get VERSE in the wallet app, on our website, Verse DEX, or on Kucoin Exchange.
Discussion
To share your thoughts, suggestions, and feedback regarding the proposal, please join the conversation in the Verse Lounge, our verified community Telegram group. Visit guild.xyz/verse to connect and contribute to the dialogue.
Your involvement is crucial in determining the direction of the Verse Ecosystem. We appreciate your dedication to the Verse community and look forward to hearing from you!
Thank you for being an integral part of the Verse journey. Together, let’s create something extraordinary!
