# BTC Liquidity Deployment into Locust Vault **URL:** \ **Category:** Proposal Discussion\ **Tags:** passed\ **Created:** [December 20, 2024, 11:41am UTC](https://forum.osmosis.zone/t/btc-liquidity-deployment-into-locust-vault/3374 "2024-12-20T11:41:49Z")\ **Posts on this page:** 4\ **Page:** 1
**Author:** ![JohnnyWyles](https://sea2.discourse-cdn.com/flex020/user_avatar/forum.osmosis.zone/johnnywyles/32/3114_2.png) [@JohnnyWyles](https://forum.osmosis.zone/u/JohnnyWyles)\ **Post date:** [December 20, 2024, 11:41am UTC](https://forum.osmosis.zone/t/btc-liquidity-deployment-into-locust-vault/3374/1 "2024-12-20T11:41:49Z")
This proposal approves the deployment of BTC previously purchased in [Proposal 859](https://daodao.zone/dao/osmosis/proposals/859) and additional USDC and BTC variants to form a second protocol liquidity position in BTC/USDC. ## Current Liquidity performance The initial protocol BTC/USDC liquidity position of $458k is deployed in a static range of 72,500 to 108,750, which has been close to being out of bounds with recent BTC rallies. This liquidity position is now valued at $462k and has generated approximately $7k in liquidity fees, catering to 7 million in volume this month. This, in turn, has generated $7k in taker fees for the protocol. ## Requested Deployment - 1.07 BTC to be deployed from the community pool, sourced from: - 0.486 BTC, [returned to the Osmosis Community Pool](https://daodao.zone/dao/osmo1rvq5cq2j35k7sqqz49e5e8zezl45fcywcawazh46qnc0g96d0d6sasqsgc/proposals/A77) as an excess after the execution of [Proposal 860](https://daodao.zone/dao/osmosis/proposals/860) - 0.37 WBTC previously collected from taker fees to be added to the alloy - 0.214 WBTC.eth.axl previously collected from taker fees to be added to the alloy - 60,000 USDC to be deployed from the community pool to provide buy-side inventory for the vault position. This is approximately a 2:1 BTC/USDC liquidity ratio. Deploy BTC into the [Locust Vault for BTC/USDC](https://trade.margined.io/osmosis/vaults/btc-usd) via the [Osmosis Liquidity subDAO](https://daodao.zone/dao/osmo1rvq5cq2j35k7sqqz49e5e8zezl45fcywcawazh46qnc0g96d0d6sasqsgc/home) **Locust Vault Parameters** - Target Pool 1943 (BTC/USDC, 0.01%) - Spread -2.5%/5% - Reposition trigger 0.25% - Performance Fee of 15% This deployment should be approximately four times as concentrated as the current static deployment. It will also be deployed within a lower LP fee pool, offering better execution prices for traders. The receipt token for the vault deposits and any excess BTC or USDC will be transferred back to the Osmosis Community Pool. ### **Risk Analysis** - Community pool exposure to Bitcoin - Liquidity position upside capture - Community pool exposure to USDC would increase if the BTC price increases. - Community pool exposure to Alloyed Bitcoin - Community Pool asset exposure to smart contracts - Community Pool asset exposure within liquidity pools - Use of Multisig for execution **Success Metrics** - Volume facilitated through position - Fees earned (LP + taker) - Slippage reduction during volatile periods - Market share of Bitcoin trading volume **Target Onchain Date** : 1st January 2025 ---
**Author:** ![LeonoorsCryptoman](https://sea2.discourse-cdn.com/flex020/user_avatar/forum.osmosis.zone/leonoorscryptoman/32/208_2.png) [@LeonoorsCryptoman](https://forum.osmosis.zone/u/LeonoorsCryptoman)\ **Post date:** [December 26, 2024, 4:11pm UTC](https://forum.osmosis.zone/t/btc-liquidity-deployment-into-locust-vault/3374/2 "2024-12-26T16:11:42Z")
Is the range on this one not quite large? Are the Locust Vaults automatically recalibrating for better positions (I can’t remember) or static positions? In case of the latter, will the liquidity be held by the multisig so that ranges can be adjusted if necessary? ---
**Author:** ![JohnnyWyles](https://sea2.discourse-cdn.com/flex020/user_avatar/forum.osmosis.zone/johnnywyles/32/3114_2.png) [@JohnnyWyles](https://forum.osmosis.zone/u/JohnnyWyles)\ **Post date:** [December 29, 2024, 10:44am UTC](https://forum.osmosis.zone/t/btc-liquidity-deployment-into-locust-vault/3374/3 "2024-12-29T10:44:03Z")
Locust vaults auto-reposition as the price moves so can be far narrower, however much narrower than this would lead to higher IL. The vault positions will be far more efficient (4-5x) at providing liquidity than the current static position. ---
**Author:** ![LeonoorsCryptoman](https://sea2.discourse-cdn.com/flex020/user_avatar/forum.osmosis.zone/leonoorscryptoman/32/208_2.png) [@LeonoorsCryptoman](https://forum.osmosis.zone/u/LeonoorsCryptoman)\ **Post date:** [January 2, 2025, 6:09pm UTC](https://forum.osmosis.zone/t/btc-liquidity-deployment-into-locust-vault/3374/4 "2025-01-02T18:09:25Z")
Clear! Then go for it 🙂