The uUSDrBTC synth has about $7.3M minted (seen here: https://tools.umaproject.org/?address=0xaBBee9fC7a882499162323EEB7BF6614193312e3), of which $7.2M is in the uUSDrBTC-USDC pool at Balancer (here: https://pools.balancer.exchange/#/pool/0x2dd7255b487a62d738110bd10f8bc4b4ea989778/). At first this seemed strange to me, but it makes sense that the asset will find its way to the highest yielding opportunity.
The synth is backed at a global collateral ratio > 2.5, which is very conservative. Still, during market panics we've seen the price of BTC quickly drop 50% or more, which would be enough to trigger liquidations on a substantial fraction of sponsors. During a liquidation, the liquidator repays the sponsor's uUSD synth debt and receives the renBTC collateral in return a few hours later. Where does the liquidator get the uUSD? There are only two places: from the Balancer pool or by minting it fresh. From the liquidator's perspective, minting it is both capital inefficient and risky (it's a panic!), so buying it from the pool is the first choice.
How much can the liquidator afford to pay for the uUSD? The liquidation rules say that a sponsor whose collateral is worth > 125% of the minted synth is safe from liquidation. When the liquidator can buy uUSD for $1.00 and a sponsor has collateral worth $1.24 for each synth, the liquidator might hope to realize a 24% profit. But there are a few problems. First, there is a 2-hour delay before the collateral is received. During a market panic, how much are you willing to pay now for one BTC to be delivered 2 hours in the future? Or on the flipside, how much would you charge someone for an at-the-money put option that expires in 2 hours? That could be a big chunk of 24%.
The second problem is that as liquidators buy uUSD from the pool, the price in terms of USDC rises. How fast? If just 10% of the sponsors are at risk, about 10% of the uUSD pool will be needed, which will drive the price up by about 20%. At this price, I wouldn't expect liquidators to buy any more uUSD from the pool. Of course, the pool looks very attractive to traders who would sell uUSD into the pool at a 20% premium. The problem is, nobody has any uUSD to sell. It's all in the pool already!
So with just a small disruption of 5-10% of sponsors needing liquidation, the entire global supply of uUSD has been exhausted. The only way forward is for well-capitalized traders to step in with renBTC and mint more uUSD, using it to either sell into the pool or perform liquidations. I'm sure that will happen to some extent, after a while. But market panics create many opportunities for liquid capital, so the competition will be strong and the possibility of a 20% return after a few hours may not be attractive enough.