tBTC (Ethereum)

tBTC

tBTC is a fully decentralized, Bitcoin-backed asset pegged to the price of BTC.

Risk Rating
Best
$58,384.00
1.54%
Summary
What we like
tBTC is a decentralized alternative to WBTC that is secured by the Threshold network of node operators. It is backed 1:1 by BTC locked on the Bitcoin network.
What we like less
On-chain governance for Threshold network does not yet extend to tBTC. The Threshold team plans to transfer control to the DAO eventually, but it is currently controlled by a 6/9 multisig with voting conducted off-chain via Snapshot.
What it means for you
tBTC allows you to access the DeFi ecosystem to earn yield on Bitcoin. For Bitcoin holders, this serves as a decentralized option for you to bridge your BTC to Ethereum.

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Information
Blockchain
  • Ethereum
Key Metrics
  • Market Cap: $185.7M
  • Fully Diluted Valluation: $185.7M
  • FDV / MC: 1
  • Ranking inside Exponential (excluding stables): #54
  • Circulating Supply: 3,180
  • Total Supply: 3,180
  • Volume (24H): $4.9M
  • ATH: $146,117.00 (05/09/2022)
  • ATL: $3,754.11 (12/28/2022)
Risk Assessment
Best
Asset Strength

tBTC is a low-cap, fully collateralized asset. This asset is exposed to the underlying risks of Threshold Bridge, a protocol rated as Good.

Asset Tokenomics

tBTC has a fixed supply. tBTC is a permissionless, DeFi-compatible version of Bitcoin. It is backed 1:1 by BTC locked on the Threshold bridge and secured by Threshold's network of node operators.

Dependencies

Threshold Bridge

Things to know about tBTC

How does tBTC work?

tBTC is a decentralized bridge between Bitcoin and Ethereum, eliminating the need for centralized intermediaries by using threshold cryptography for security. It operates on the Threshold Network, where a randomly selected group of node operators secures the deposited Bitcoin. Actions on these deposits require a majority agreement among the operators, who are rotated weekly to prevent collusion. This model, based on the honest-majority assumption, allows Bitcoin holders to engage securely with the DeFi ecosystem for activities such as borrowing, lending, and liquidity provision. Additionally, an insurance backstop provides a safety net in case of security breaches. Thus, tBTC allows users to trust in mathematical operations and protocols rather than relying on physical hardware or personnel.

How secure is tBTC?

tBTC ensures high security through a multifaceted approach. Node operators must stake 40,000 T tokens and maintain a minimum of 0.5 ETH to cover transaction fees, aligning their interests with the system’s integrity. Security is further enhanced by the use of threshold cryptography, which requires majority consensus for actions, and the weekly rotation of operators to prevent collusion. In the case of Bitcoin held as collateral being lost or compromised, a Coverage Pool acts as a financial safety net by converting its pool of assets into BTC to stabilize the supply peg. Additionally, the governance of this pool is managed by the Threshold DAO, which supports a decentralized, community-driven approach and allows for strategic asset diversification and incentives for external deposits, reinforcing the protocol's resilience and security.

What are the fees for using tBTC

For using tBTC, the fees are action-based. Currently, there is no fee for minting tBTC (0%), while the redemption fee is set at 0.2%. These fees can be adjusted through a governance process.

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