V2 Pool(s) for LayerZero USDC/wETH (0.15%), USDC/wBTC (0.15%) and HBAR/wBTC (0.30%)

Request for Comment
1
  • Title: V2 Pool(s) for LayerZero USDC/wETH (0.15%), USDC/wBTC (0.15%) and HBAR/wBTC (0.30%)
  • Author(s): Bonzo Finance Labs, SaucerSwap Labs
  • SaucerSwap Voting Interface: n/a
  • Related Discussions: n/a
  • Submission Date: June 18th, 2025

Summary

We propose the creation of three (3) concentrated liquidity V2 pools for LayerZero-bridged wETH and wBTC. The desired pools / pairs for creation include:

  • USDC*/wETH - 0.15%
  • USDC*/wBTC - 0.15%
  • HBAR/wBTC - 0.30%

*Hedera native $USDC

This initiative will enhance capital efficiency, increase Total Value Locked (TVL), and strengthen liquidity depth for critical trading pairs on the Hedera network, while supporting cross-chain interoperability using LayerZero’s omnichain (OFT) infrastructure. Additionally, support for these critical assets in SaucerSwap supports the ability for the Hedera ecosystem to onboarding net new retail and institutional users via bridges that utilize LayerZero.

Abstract

The proposed V2 pools will leverage SaucerSwap’s concentrated liquidity mechanism (based on Uniswap V3 architecture) to create efficient trading venues for LayerZero-bridged assets wBTC and wETH.

Pools implemented with a 0.15% fee tier ($USDC/$wETH and $USDC/$wBTC), and a 0.30% fee tier ($HBAR/$wBTC), aim to optimize the balance between liquidity provider returns and trader affordability, while establishing Hedera as a competitive destination for cross-chain DeFi activity.

The choice of pairing Hedera native $USDC with $wETH and $wBTC pools offers the additional benefit of boosting Hedera native $USDC liquidity (TVL); it’s been observed that some of the deepest liquidity pools on decentralized exchanges, across alternative networks, have paired $wETH and $wBTC liquidity with $USDC.

The choice of pairing $HBAR for with $wBTC for the third pool, in combination with setting a fee tier of 0.30%, ensures adequate returns for liquidity providers taking on additional risk of pairing two volatile assets together, increasing the potential for impermanent loss.

LayerZero Integration Benefits

LayerZero’s omnichain protocol enables seamless asset transfers across multiple blockchain networks, making bridged assets like wETH and wBTC available on Hedera. These assets represent some of the most liquid and widely-used tokens in DeFi, with combined market capitalizations exceeding $500 billion.

Current Market Gap

While Hedera currently offers bridging via HashPort, the ecosystem lacks deep liquidity pools for major cross-chain assets and accessibility for retail and institutional users on alternative networks that utilize the most ubiquitous bridging infrastructure across web3. This proposal addresses this gap by supporting a second cross-chain option and up-leveling Hedera’s exposure.

Detailed Motivation

Strategic Importance

  • Cross-Chain Liquidity Hub: Establishing Hedera as a premier destination for LayerZero asset trading
  • Capital Efficiency: V2’s concentrated liquidity allows LPs to deploy capital within specific price ranges, potentially increasing returns by 2-10x compared to V1 pools
  • Network Growth: Deep liquidity pools attract more users, protocols, and institutional capital to Hedera
  • Fee Revenue: 0.15% and 0.30% fee tier(s) balances competitive pricing with sustainable LP returns

Benefits Analysis

For Liquidity Providers:

  • Enhanced Returns: Up to 10x capital efficiency compared to full-range liquidity
  • Flexible Strategies: Ability to customize price ranges based on market outlook
  • Fee Optimization: 0.30% fee tier for the HBAR pair, and 0.15% fee tier for $USDC pair(s) offers a balanced approach of attractive yield and competitive trading fees.
  • Impermanent Loss Management: Concentrated positions can reduce IL exposure when properly managed

For Traders

  • Minimal Slippage: Deep liquidity reduces price impact for larger trades
  • Competitive Fees: 0.15% and 0.30% fee(s) competitive with other major DEXs
  • Cross-Chain Access: Seamless trading of major crypto assets that can be bridged via LayerZero

For SaucerSwap

  • Increased TVL: Major bridged asset pools have the ability to attract significant capital
  • Trading Volume Growth: Popular pairs drive higher transaction volume
  • Fee Revenue: Protocol fees from active trading of majors
  • Market Position: Establishes SaucerSwap as the premier Hedera DEX

For Hedera DeFi Ecosystem

  • DeFi Growth: Opens the door to attracting and incentivizing net new DeFi users and liquidity to Hedera
  • Network Utilization: Increased transaction volume, fees, and account growth
  • Institutional Interest: Professional-grade liquidity attracts institutional users
  • Cross-Chain Bridge: Strengthens Hedera’s position in multi-chain DeFi

Governance & Future

Cross-Chain Expansion

This proposal sets precedent for the possibility of additional LayerZero asset integrations, including but not limited to:

  • Additional stablecoins (USDT, DAI, etc.)
  • Layer 1 tokens (AVAX, MATIC, BNB, etc.)
  • DeFi blue chips (UNI, AAVE, COMP, etc.)

Community Input and Discussion

We encourage community feedback on:

  1. Fee tier selection (0.15% and 0.30% vs alternatives)
  2. LayerZero Bridged Asset Support

Conclusion

The creation of asset pools that support bridged wETH and wBTC on Hedera offers significant opportunities for SaucerSwap and the broader Hedera DeFi ecosystem. By leveraging concentrated liquidity and supporting major cross-chain assets from a bridge provider that is ubiquitous across web3, the Hedera ecosystem can establish a foundation for sustainable growth, attract institutional capital, net new users, and position Hedera as a premier destination for efficient DeFi trading.

Voting Options

  • FOR: Support the creation of V2 $USDC/$wETH (0.15%), $USDC/$wBTC (0.15%), and $HBAR/$wBTC (0.30%) LayerZero asset pools as outlined in this proposal.

  • AGAINST: Reject this proposal and request revisions or alternative approaches.

  • ABSTAIN: No position on this proposal.

2 Likes
2

I appreciate an abstain option. Although no idea how many people would actually vote to abstain.

A Bonzo and SaucerSwap labs co authored proposal. :eyes:
There’s probably my confusion on my part, but I thought the USDC that’s bridged from LayerZero would come out as the native Hedera USDC.

And I guess the presumption is that LayerZero integration on SaucerSwap is ready on Mainnet soon, or is this a proposal for a more distant future?

Maybe ask questions on the fee tiers, but I don’t think they are unreasonable. 0.15% seems pretty tight though, but if we are expecting like a bajillion amount of liquidity, then it seems okay.

Final substantive question. How much liquidity is going to be used to initialize the pools?

3 Likes
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Great questions here — appreciate your reply and thinking :folded_hands:

I appreciate an abstain option. Although no idea how many people would actually vote to abstain.

Good point; I’ll remove that from this proposal!

A Bonzo and SaucerSwap labs co authored proposal. :eyes:

Yes; both lab cos are working together on this initiative to help push forward the DeFi ecosystem on Hedera; the two protocols continue to support one another — Bonzo Finance drives trading volume on SaucerSwap via its liquidation bot ecosystem and SaucerSwap’s asset liquidity ensures Bonzo Finance operates safely / is a pre-requisite for asset listings on Bonzo Finance. In addition, as Bonzo Vaults (automated yield strategies) rolls out, it should further enhance SaucerSwap’s TVL, market efficiency, and users.

There’s probably my confusion on my part, but I thought the USDC that’s bridged from LayerZero would come out as the native Hedera USDC.

There’s no confirmation yet that LayerZero bridged $USDC will be Hedera native $USDC, although that is desired — the instantiation of the pools cited in this proposal is focused around support for LayerZero bridged wBTC and wETH; their pairing with Hedera native $USDC is regardless of where that $USDC comes from (bridged as Hedera native $USDC, on-ramped from a CEX, etc.).

And I guess the presumption is that LayerZero integration on SaucerSwap is ready on Mainnet soon, or is this a proposal for a more distant future?

This question will need to be addressed by the SaucerSwap Labs team, but I’ll offer my personal opinion / understanding — there are two types of integrations at play; the first is v2 liquidity pool support for specific LayerZero bridged assets (this proposal for wETH and wBTC), and the second would likely be deeper integration with LayerZero into SaucerSwap, whether that be front-end exposure of bridges or potentially hooks that allow for seamless cross-chain transaction workflows (possibly bridge → deposit in a single workflow, cross-chain swaps, etc.). But, again, up to their team to take this one.

Maybe ask questions on the fee tiers, but I don’t think they are unreasonable. 0.15% seems pretty tight though, but if we are expecting like a bajillion amount of liquidity, then it seems okay.

0.15% was proposed as an attempt to find a balance between incentivizing / rewarding liquidity suppliers, while leaning into competitiveness with DEXs on alternative networks support for wBTC / wETH — the hypothesis being that if it’s attractive to trade majors on Hedera from a cost perspective, especially if doing so in large quantities, it will help to retain net new users joining the Hedera DeFi ecosystem.

Agreed that there’s no right answer here though — it’s a bit of an art and a science.

Final substantive question. How much liquidity is going to be used to initialize the pools?

We don’t yet have specific figures on liquidity commitments, but I can say with confidence that commitments do exist. The first step is ensuring a path to instantiate these pools via this proposal.

4 Likes
4

Very exciting!

I’d love to see some of the reasons for the .15% fee tier and a comparison of fees from other chains.

I’d lean towards making lp providers safe and compensated and then look to shave percentage points on yield. But if the groups that committed to providing lp comfortable with the fee tier then what do I know?

1 Like
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Very good, i like. proceed.

2 Likes
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Great proposal. LayerZero for wETH/wBTC is exactly what Hedera needs it should bring solid crosschain volume.

Fee tiers look right to me. 0.15% and 0.30% makes sense for the volatile pairs and concentrated liquidity will be huge for efficiency.

I’m in. 230K (I need more voting power to support such initiatives in future)