Threshold DAO Approves Wormhole’s $750M tBTC Proposal for Cross-Chain Bitcoin Liquidity
By: angle42External PR
SAN MATEO, Calif., May 11th, 2023 9:00am EDT - tBTC, the decentralized, permissionless, and scalable Bitcoin equivalent, is collaborating with interoperability protocol Wormhole in an initiative that will open 20+ new ecosystems to tBTC and catalyze the bridging of up to 26,000 BTC (roughly USD$750 million) throughout DeFi.
Wormhole proposed the integration to the Threshold community in mid-April, saying its objective was to help tBTC become the dominant BTC proxy in on-chain DeFi. The agreement won strong community support and was fully approved on April 29th.
“Instead of Bitcoin on Ethereum, tBTC will become Bitcoin, everywhere,” Keep Network Co-Founder and Threshold Contributor Matt Luongo said.
The Wormhole integration will allow tBTC to be transferred to both Ethereum Virtual Machine (EVM) chains (e.g. Arbitrum, Optimism and Polygon), and non-EVM chains (e.g. Solana, Aptos, Sui and Cosmos).
The bridging plan relies upon a new method for bridging ERC-20 tokens that allows the efficient deployment of capital to Ethereum sidechains without liquidity fragmentation.
Instead of creating wrapped tokens for each chain, soaking up valuable liquidity that could be used elsewhere, tBTC will be minted on Ethereum. A canonical token – i.e. one that is native to an ecosystem rather than wrapped – will then be deployed for each new chain. This way, the tBTC supply remains intact and risk is corralled in local ecosystems.
“Wrapped Bitcoin has historically had a problem of centralization risk that has prevented strong, safe adoption of BTC in on-chain DeFi. We are excited to be working with Threshold to enable the proliferation of truly trustless Bitcoin that is poised to become the industry-standard across all leading DeFi ecosystems,” said Robinson Burkey, Wormhole Core Contributor and Head of Growth.
It is also expected that the collaboration will involve the Threshold DAO launching a cross-chain liquidity bootstrapping operation with the potential to attract up to 26,000 BTC of deposits. Experienced liquidity providers will seed tBTC liquidity in important ecosystems in exchange for the option to purchase approximately $20 million worth of Threshold’s $T tokens at or above the spot price.
“tBTC was created with one goal in mind: to unleash the untapped potential of the world’s most popular cryptocurrency across DeFi,” Luongo said. ‘With this agreement, we are a giant step closer to achieving that.”
About tBTC/Threshold DAO
tBTC is a decentralized, permissionless, and scalable Bitcoin equivalent that allows users to access the Ethereum and cross chain DeFi ecosystem. Each tBTC token is fully backed by 1 BTC held in reserve. Threshold DAO, the network behind tBTC, replaces centralized intermediaries with a randomly selected group of node operators who secure your deposited Bitcoin through threshold cryptography. Visit https://threshold.network/ for more information.
Wormhole is the industry standard cross-chain messaging protocol powering applications across Web3. Wormhole provides developers access to liquidity and users on over 20 of the leading blockchain networks, enabling use cases that span DeFi, NFTs, governance, and more. Wormhole enables a growing suite of products to build on its messaging layer. Wormhole Connect is a key messaging layer product, providing developers an in-app bridging widget that can be integrated in as few as 3 lines of code. The wider Wormhole network is trusted and used by teams like Circle (USDC) and Uniswap, and to date, the platform has facilitated the transfer of over 35 billion dollars through hundreds of millions of cross-chain messages.