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0 sats \ 0 replies \ @om OP 24 Apr \ parent \ on: Why SBTC won't work bitcoin
There is some similarity but I want to explain the major difference here:
- 1 UST is a claim on 1 USD worth of LUNA
- 1 DAI is a claim on $0.50 USDC and $0.50 worth of ETH
- 1 SBTC is a claim on 1 BTC locked by the STX validators but there is also >1 BTC worth of STX lying around that 1 SBTC is not a claim on.
Bottom line is that SBTC is very capital inefficient as >2 BTC of value must be locked to produce 1 SBTC. But it can't depeg in the same way that UST did. (Maybe in some other way.)