Exploring cross-chain liquidity for B3TR using B3TR and B3M0 Validator-generated VTHO

VeBetterDAO
1

Hi everyone,

I’d like to open a preliminary discussion around a possible way to expand the market reach of B3TR beyond VeChain and make it accessible to a broader user base.

With the upcoming Interstellar developments and VeChain becoming increasingly connected with the wider EVM ecosystem, I think it could be worth exploring whether VeBetterDAO should establish a small amount of DAO-owned liquidity for B3TR on Ethereum.

The basic idea

The concept would be to use a limited amount of:

  • B3TR from the VeBetterDAO Treasury
  • VTHO generated by B3M0

and bridge these assets from VeChain to Ethereum through Wanchain, then deploy them as a B3TR/VTHO liquidity pool on Uniswap.

The liquidity position would remain owned by the DAO, or by an appropriate governance-controlled structure.

This is not intended as a formal proposal at this stage. I’d first like to understand whether the idea is technically feasible, desirable from a governance perspective, and interesting to the community.

Why explore this?

The main goal would be to expand the potential market and accessibility of B3TR.

Today B3TR is mainly exposed to users already active within the VeChain ecosystem. Having B3TR liquidity on Ethereum could potentially:

  • expose B3TR to a much larger DeFi user base;
  • make the token accessible through Ethereum-native wallets, DEXs and aggregators;
  • improve cross-chain price discovery and arbitrage opportunities;
  • increase awareness of VeBetterDAO outside the existing VeChain community;
  • create an additional productive use for VTHO generated by B3M0;
  • test DAO-owned cross-chain liquidity without requiring the DAO to acquire external assets such as USDC or ETH.

Another potentially interesting aspect is that the liquidity pool itself could become a small revenue-generating asset for VeBetterDAO.

If the LP position is owned by the DAO, the trading fees generated by swaps in the B3TR/VTHO pool could flow back to the DAO-controlled position. In this way, part of the Treasury would not simply be allocated to liquidity provision, but could become productive capital that helps generate recurring fee revenue for the DAO.

In a simplified form, the idea would be:

DAO Treasury + B3M0-generated VTHO → DAO-owned liquidity → trading activity → LP fees → DAO

This could create a small self-reinforcing mechanism where VeBetterDAO uses its own assets to expand B3TR liquidity and, if the pool generates sufficient trading activity, earns part of that value back through fees.

Of course, this should not be presented as guaranteed revenue. The economic outcome would depend on trading volume, fee tier, impermanent loss, bridge costs and overall market activity. But I think it is worth evaluating whether DAO-owned liquidity could serve both as market infrastructure and as a productive Treasury asset.

I see the B3TR/VTHO pair primarily as a possible first step toward a broader cross-chain presence for B3TR, rather than necessarily the final or optimal liquidity pair.

If an Ethereum market for B3TR develops over time, third parties could potentially create additional pools such as B3TR/ETH or B3TR/USDC.

Why now?

Interstellar seems likely to further reduce the separation between VeChain and the wider EVM ecosystem.

If VeChain is becoming easier for Ethereum developers and users to interact with, I think it may also make sense to explore the opposite direction: bringing B3TR closer to Ethereum liquidity and users.

Rather than waiting for external liquidity providers to create a market for B3TR, the DAO could potentially bootstrap a small initial market itself.

Questions for the community

Before thinking about any formal proposal, I’d be particularly interested in feedback on a few points:

  1. Is bridging Treasury-owned B3TR and B3M0-generated VTHO to Ethereum technically and operationally feasible?
  2. What would be the appropriate governance/custody structure for the bridged assets and the Uniswap LP position?
  3. Could the LP fees be routed or periodically returned directly to the VeBetterDAO Treasury in a trust-minimized way?
  4. Would a B3TR/VTHO pool provide enough utility on Ethereum, or would the limited native demand for VTHO make the pair ineffective?
  5. Would a small pilot make sense before considering a larger deployment?
  6. What risks should be considered regarding bridge exposure, impermanent loss, liquidity fragmentation and Treasury management?
  7. More broadly, do you think VeBetterDAO should actively use part of its Treasury to expand B3TR liquidity outside VeChain while potentially generating fee revenue for the DAO itself?

My main interest here is not creating another speculative market, but exploring whether DAO-owned liquidity could become infrastructure for expanding the reach of B3TR and VeBetterDAO, while also making part of the Treasury productive.

Curious to hear everyone’s thoughts, especially from people familiar with the Treasury contracts, B3M0, Wanchain and Uniswap.

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2

This is a great idea and, in my view, potentially a game-changing one. It would definitely have my support.

To answer your questions:

1) From an operational perspective, I think it should be feasible. I’m not particularly tech-savvy, so I can’t comment on all the technical details, but compared to some previous proposals, this doesn’t seem overly complex to implement.

2) At the moment, there are around 70M B3TR in the treasury , which corresponds to roughly $647k USD. Based on my calculations, that would translate to approximately 1.44B VTHO. One consideration is that even a relatively small amount of B3TR would require around 20x more VTHO to establish liquidity. I’m not sure how much VTHO the B3M0 validator generates on a weekly basis, but I imagine it could take several weeks to accumulate enough VTHO to build a meaningful LP position.

3) I would imagine everything would be on-chain? Not sure just because of the wanchain bridge

4) My main concern is whether a B3TR/VTHO pair would generate sufficient trading activity on Ethereum. B3TR has a strong value proposition, but VTHO is an utility token which is mostly tied to the VeChain ecosystem, so demand from Ethereum-native users may be limited. So i understand your concern, maybe VET would be better solution? or another token? And is there any pair between ETH/VTHO, so people can get VTHO?

5) I think starting with a small pilot makes a lot of sense. It would allow us to test the concept, identify any potential flaws or unintended consequences, and make improvements before scaling up.

6) Impermanent Loss would be a risk that we would need to accept since there is no way around it and could easily happen.

7) I believe it makes sense to use B3TR from the treasury, as the initiative is intended to benefit the DAO as a whole. If successful, the value created would ultimately flow back to the ecosystem and its users.

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3

Thanks for the feedback! I think you raised some very relevant points.

2) B3M0 has already generated a little over 10M VTHO in validator rewards since it started validating blocks.

My idea would definitely be to start with a relatively small pilot rather than committing a large amount of Treasury assets from the beginning. For example, something in the range of 400k B3TR with the equivalent value in VTHO could be considered, although the exact amount should obviously depend on the technical implementation, current Treasury transfer limits and community feedback.

The purpose of the pilot would mainly be to understand whether the concept works before considering anything larger.

3) Wanchain is the cross-chain infrastructure I had in mind. Both B3TR and VTHO can already be bridged between VeChain and Ethereum through Wanchain, which is why I think Ethereum is the most logical place to explore this.

In my opinion, connecting B3TR to Ethereum is particularly important because the main objective here is to expose B3TR to a much broader market and user base.

The part I would still like to understand better is how ownership and control of the bridged assets and the LP position could remain as trust-minimized and DAO-controlled as possible.

4) This is probably the most important question.

The reason I initially suggested B3TR/VTHO rather than VET or another token is that B3TR and the VTHO generated by B3M0 are the two resources that the DAO can naturally use for this type of initiative.

The Treasury can technically hold VET and other assets as well, but the amount of VET available to the DAO is relatively limited and largely comes from external transfers or donations. I would rather avoid requiring the DAO to acquire another asset just to bootstrap the pool.

I agree that VTHO demand on Ethereum may initially be limited. However, I think we should also look at this from the opposite direction: the DAO could be the one that creates the initial conditions for a market to develop.

If a DAO-owned B3TR/VTHO pool starts generating liquidity and activity on Ethereum, third-party liquidity providers could potentially see an opportunity to create complementary pools such as ETH/VTHO, B3TR/ETH or other pairs.

There is obviously no guarantee that this would happen, but someone has to create the first piece of infrastructure before a broader market can develop.

It could also give VTHO an additional source of visibility and potentially demand outside VeChain, which would be an interesting secondary effect to observe during the pilot.

5) Exactly. I don’t think anyone can guarantee that an experiment like this will succeed.

That is precisely why I believe a small and controlled pilot makes sense. We can test it with limited resources, collect real data and then let the DAO decide whether it is worth expanding, modifying or stopping.

6) Agreed. Impermanent loss would simply have to be considered one of the risks of the experiment and evaluated against the fees generated and the broader strategic benefits of creating cross-chain liquidity.

7) This is really the core of the idea for me.

I would like to explore the possibility of creating a small DAO-owned B3TR/VTHO liquidity pool on Uniswap.

The DAO would provide the initial liquidity, retain ownership of the LP position and, ideally, the trading fees generated by that liquidity would remain under DAO control.

So instead of simply spending Treasury assets, part of the Treasury could potentially become productive infrastructure:

DAO assets → B3TR/VTHO liquidity → trading activity → LP fees → DAO

Even if the initial pool is small, the bigger objective would be to create a first bridge between B3TR and the Ethereum DeFi market and see whether the market can grow organically from there.

4

Discord discussion summary and some additional context

I’d like to bring the Discord discussion here as well so that everyone following this topic has the same context.

Trying to develop the same idea through two parallel conversations on Discord and Discourse is becoming quite difficult and a little chaotic. Useful questions, technical details and suggestions can easily get lost between the two platforms.

So I’ll try to summarize here what has been discussed on Discord so far, and hopefully we can use this thread as the main place to continue developing the idea.

There was generally positive feedback around the idea of bringing B3TR liquidity to Ethereum, particularly through Uniswap.

One suggestion was that, if the experiment proved successful, it could eventually make sense to explore liquidity on other DEXs or platforms as well.

Another interesting idea was whether the fees generated by DAO-owned liquidity could eventually be reused to support the ecosystem, potentially even through mechanisms such as B3TR buybacks. I personally see that as something worth discussing separately, but it highlights an important concept: the DAO could potentially turn part of its Treasury into productive liquidity infrastructure rather than simply spending those assets.

The main point of debate was once again the B3TR/VTHO trading pair.

A concern raised on Discord was that pairing B3TR directly with USDC or USDT would probably provide easier access to Ethereum-native users because stablecoins already have deep liquidity and widespread demand.

I completely understand that argument.

My reasoning behind starting with B3TR/VTHO, however, is that these are the two assets naturally available to the DAO for this kind of experiment.

The DAO already has B3TR in its Treasury, while B3M0 generates VTHO through its validator activity. This means that, in principle, the DAO could bootstrap liquidity using resources already generated within its own ecosystem, without first having to sell assets or acquire USDC, USDT or ETH.

My view is that the DAO does not necessarily need to create the final and most efficient market from day one.

It could instead create the first layer of liquidity.

If a DAO-owned B3TR/VTHO market on Ethereum started generating activity and interest, third-party liquidity providers could potentially see opportunities to create complementary markets such as:

  • B3TR/ETH
  • B3TR/USDC
  • VTHO/ETH
  • VTHO/USDC

There is obviously no guarantee that this would happen, but someone has to create the initial market infrastructure before a broader ecosystem can develop around it.

B3M0 validator rewards

Another topic discussed on Discord was the amount of VTHO generated by B3M0.

Based on the validator activity we have been looking at, B3M0 appears to have generated roughly 10–10.5M VTHO in validator rewards since the transition to Stargate.

The validator activity can be followed here:

Looking at the on-chain information, the beneficiary receiving B3M0 validator rewards appears to have changed over time.

The previous beneficiary was:

0x68F6f3Ccb3aFfcb857788E6Bb94DF8348ab3D1ed

and the current/newer beneficiary appears to be:

0xbEA5F23e1ff456a3d6c168bD509Ba2976392094f

I think this is useful information for understanding the reward flow, but it also leads to what is probably one of the most important questions we still need to answer:

Who ultimately governs these validator rewards, and can their use be authorized through VeBetterDAO governance proposals?

At the moment I don’t have a definitive answer.

We need to understand whether these VTHO rewards are directly accessible through DAO governance, whether the beneficiary wallets are controlled through another structure, or whether some action from the VeChain Foundation / VeChain team would be required.

This is something I think we should clarify with @VeChainOps or someone directly familiar with B3M0’s validator infrastructure before moving toward a formal proposal.

The longer-term vision

I also want to clarify that, for me, this idea is not only about creating one liquidity pool on Uniswap.

The longer-term objective is to explore how VeBetterDAO could start building economic connections between VeChain and other blockchain ecosystems.

If VeChain is moving toward greater interoperability and stronger compatibility with the broader EVM world, I think VeBetterDAO should also consider how B3TR can participate in that expansion.

A B3TR/VTHO pool on Ethereum would therefore be a small first experiment, but the broader vision would be to make B3TR increasingly accessible outside the boundaries of VeChain and create additional entry points into the VeBetter ecosystem.

I also think this could eventually benefit the builders who have launched dApps through VeBetterDAO.

If B3TR becomes easier to access from other ecosystems, builders with a long-term strategic vision could potentially use that broader liquidity and cross-chain presence to expose their own applications, communities and economic models to users who are not currently part of VeChain.

In other words, the potential benefit would not necessarily stop with the B3TR token itself.

If successful, cross-chain B3TR infrastructure could become another tool available to the whole VeBetter ecosystem.

Ethereum would simply be the first logical place to test this because B3TR and VTHO can already be bridged there through Wanchain.

In the future, if the experiment worked and the infrastructure allowed it, the same general approach could potentially be explored with other blockchain ecosystems as well.

Why I still favour a small pilot

I don’t think anyone can guarantee that this experiment will succeed, and that is exactly why I believe it should start small.

The goal of an initial pilot would be to collect real data and answer questions such as:

  • Is there actual demand for B3TR/VTHO on Ethereum?
  • How much trading activity does the pool generate?
  • How much fee revenue can the DAO earn?
  • How significant is impermanent loss?
  • Can the DAO retain effective control of the bridged assets and LP position?
  • Can B3M0 validator rewards actually be governed and used by the DAO?
  • Does the presence of this pool encourage third parties to create additional B3TR or VTHO liquidity?
  • Does cross-chain availability create any measurable benefit for VeBetterDAO applications and builders?

For me, the core concept remains:

DAO-owned B3TR + B3M0-generated VTHO → cross-chain DAO-owned liquidity → broader B3TR accessibility → trading activity → fees returning to the DAO → potentially greater external interest and additional liquidity.

The first pool would only be the experiment.

The real question I would like us to explore is whether VeBetterDAO can use its own resources to begin building a wider cross-chain market for B3TR and, over time, create more connections between VeChain, external liquidity and the builders operating within the VeBetter ecosystem.

I’d really appreciate it if we could continue the main discussion here on Discourse so that technical, governance and economic feedback can remain in one place and we can gradually determine whether this idea is feasible enough to become a formal proposal.

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