Rebalance Osmosis Treasury towards BTC (25%)

This proposal seeks to rebalance the composition of the Osmosis Community Pool from 11% BTC to 25% by utilizing stablecoin holdings (51%).

This would be achieved through a purchase of BTC on Osmosis utilizing 500,000 USDC in limit orders.

Community Pool Distribution

Taking into account liquidity deployments, and excluding the OSMO holdings, the community pool currently holds $3.9m in assets, approximately half of which is already deployed as protocol liquidity.

This is formed primarily of:

51% Stablecoins

13.5% ATOM

11% BTC

5.3% ETH

4% AXL

2% XRP

1.9% AKT

1.6% TIA

1.5% DOGE

This proposal asks that BTC's share is increased to 25% through a spend of 500,000 USDC.

Strategic Rationale

The community pool serves two main functions:

• Community spend initiatives leading to increased onchain activity.
• Resolution of security events involving Alloyed asset variants.

As Alloyed BTC increases in liquidity, the Community Pool should maintain a level of exposure to major alloys to align holdings with risk exposure to potential security events while also balancing exposure to volatile assets.

In real value terms, Osmosis currently holds around 4 BTC compared to the 117 BTC in the alloy due to previous purchases reverting to USDC due to BTC price increases. Any purchases of BTC by Osmosis should therefore either be in relatively passive positions to maintain BTC holdings while generating fees, or in single sided positions.

Deployment

This proposal sends 500,000 USDC to the Osmosis Liquidity subDAO to action the conversion to BTC.

Conversion will utilize limit orders on Osmosis with the purchase price set to the lowest of the 50 day moving average of BTC in USDC or spot price.

Once conversion is complete, the BTC will be returned to the Osmosis Community Pool for holding unless further actions are specified in another proposal.

Forum Post: https://forum.osmosis.zone/t/rebalance-osmosis-treasury-towards-btc-25/3750