Here are my thoughts as growth lead and a member of the thUSD steering committee; there are many problems with thUSD at this point in time, without easy solutions, the main being:
Problem: Poor BOB uptake
Solution: Discontinue Support for thUSD on BOB, no incentives or spice allocation
Problem: Users fears about being redeemed by others
Short Term Solution: The DAO maintaining a low CR vault
Long Term Solution: Liquidity V2 Fork
Problem: Peg Stability
Solution: A DAO owned arbitrage bot and pairing with a yield bearing stable
Problem: Limited use case for thUSD
Solution: Getting an oracle, to create the ability to use thUSD in lending and dperp markets (although there is no guarantee there will be demand)
Problem: Depth of Liquidity for tBTC/ thUSD
Solution: No easy solution here, need to find a way to incentivise large volume of smaller users to swap between tBTC and thUSD or artificially boost depth through incentives
My recommendation is that the DAO makes the decision to either of the following:
Option 1
Cease funding for the thUSD steering committee
Hire one person for 20 hours per week to run thUSD in a product/ growth focussed role (20x85x4.3= $7,310).
Hire one person for 20 hours per week in a dev role (20x85x4.3= $7,310).
Eliminate support for BOB and concentrate support for thUSD on mainnet, reducing the total budget to 20k a month in incentives(this should include any discretionary new market launches).
& secure a chainlink oracle to allow for single sided yield opportunities (5k a month).
This is the minimum in my opinion for thUSD to function and grow, this should be reviewed on a 3 monthly basis to make the decision to wind down, maintain or expand thUSD.
This comes at a monthly cost of ~40k, not including any additional miscellaneous costs.
Option 2
Wind down and discontinue support for thUSD with scope to add it to Threshold’s product offering with a Liquidity v2 fork, allowing for deployment via Threshold’s appchain.
My Two Sats
Liquity V1 took 8.4m in funding, whilst a majority of this was used to build LUSD from the ground up, I imagine they spent a considerable amount of this on incentives and had more than just a team of two part time employees, all for it to reach 380m TVL pre liquity v2 launch.
The main problem is that thUSD is constrained by tBTC’s growth, while it’s not constrained by ETH so much, there are other solutions on the market that are multiple development cycles ahead of thUSD.
From 2023 to 2024, Liquity v1 grew from 411m to 720m in TVL, this netted about 3.6m in fees. From 2024 to 2025, LUSD shrank from 720m to 413m TVL, which netted 1.4 million in fees.
I think people should avoid thinking in sunk cost terms and focus on opportunity cost. There are significantly more CDPs in the space than a year ago, we’re also directly competing with major lending venues for a BTC → USD route, inadvertently competing against ourselves. I do believe that almost half a million a year in thUSD costs would be better served growing tBTC.
Once the appchain is built and tBTC isn’t so much a limiting factor, we should pick up the development of thUSD again.