Prop 963: Alloyed BTC: Adjust Static Caps for WBTC Variants

This proposal would reduce the static limits of WBTC variants within Alloyed BTC on Osmosis.

The goal is to rebalance the Alloyed BTC composition by capping WBTC variant exposure at 95%, reducing reliance on centralized bridges, and encouraging the use of alternatives that may be more direct or decentralized.

Proposed Adjustment

This proposal would reduce the caps on WBTC variants within the Alloy to a total of 95%, promoting broader participation from other bridged representatives within the Alloy.

Alloyed BTC was designed to support diverse BTC representations on Osmosis, including decentralized bridges that directly connect to the Bitcoin blockchain. Reducing WBTC’s cap forces the use of alternative representations, potentially increasing the adoption of decentralized alternatives.

As this proposal results in WBTC only being able to represent 95% of the variants, at least 5% must consist of the other representatives, increasing from the current 1%.

These changes would effectively pause inflows for WBTC.eth.axl until alternative bridged representatives like nBTC, cbBTC, or ckBTC make up a higher share of the alloy.

Alloyed BTC

Alloyed BTC was recognized as the canonical Bitcoin on Osmosis in Proposal 813.

It currently has around 111 BTC in supply on Osmosis and consists of:

• WBTC.eth.axl (Axelar bridge from Ethereum) (75% cap)
• WBTC (Natively Issued on Osmosis)
• ckBTC (Chain-Key Bitcoin via ICP) (35% cap)
• nBTC (Nomic Bridged Bitcoin) (35% cap)
• cbBTC (Coinbase Bitcoin via Axelar) (75% cap)
• WBTC.eth.atom (Eureka via Cosmos Hub) (10% cap)

For a complete description of Alloyed Assets, see the Blog Post.

To view all Alloyed Statistics, see the Alloyed Dashboard.

Forum Post: https://forum.osmosis.zone/t/alloyed-btc-adjust-static-caps-for-wbtc-variants/3818