tBTC: A Decentralized Solution to Bring Bitcoin to the Ethereum Network
Bridging blockchains is critical in DeFi: tBTC brings a safe way to connect Bitcoin and Ethereum that’s built with the founding principles of crypto.
By Matt Luongo, CEO, Thesis
Updated March 15, 2021 • 3 min read
tBTC is a safe and permissionless bridge between Bitcoin and Ethereum. It is designed to let people safely and simply exchange BTC for tBTC, an ERC-20 token that can be used on DeFi platforms, at a rate of 1:1. Each tBTC token is fully backed and matched by at least 1 BTC held in reserve.
Decentralized finance — more commonly known as DeFi — offers new ways to earn with crypto, while simultaneously laying the groundwork for a blockchain economy capable of handling core financial functions such as savings, lending, and insurance.
But, if DeFi is to succeed in offering a transparent, fair, and practical alternative to the existing financial system, it will likely need to more meaningfully expand beyond the Ethereum blockchain. Specifically, DeFi needs the community, credibility, and liquidity that only Bitcoin can provide. Bitcoin accounted for nearly 63% of the total crypto market cap, as of January 2021 and its widespread familiarity and adoption across all audiences and customer segments makes it a crucial component to the long-term growth of the decentralized economy. For DeFi to gain mainstream trust and adoption, any Bitcoin-Ethereum bridge must be built in accordance with the foundational principles of crypto: decentralization, security, and reliability.
That’s why we’ve built tBTC. A project of Keep, Summa, and the Cross-Chain Group, tBTC is a safe and permissionless bridge between Bitcoin and Ethereum. It is designed to let people safely and simply exchange BTC for tBTC, an ERC-20 token that can be used on DeFi platforms, at a rate of 1:1. Each tBTC token is fully backed and matched by at least 1 BTC held in reserve.
The tBTC project is the only decentralized solution for BTC on Ethereum. The network is trustless, using a system of “signers” selected by a random beacon to safeguard the deposited BTC. The tBTC token can be converted to BTC, and vice-versa, at any time, with no intermediary needed to sign off. And, it only takes three easy steps for people to mint the tBTC.
The tBTC project has been designed with the highest standards of security and usability. Fully open-source and insured, tBTC has undergone rigorous testing and been subject to multiple audits. The project uses a threshold elliptical curve digital signature algorithm (ECDSA), which is audited and used on highly regarded crypto wallets and exchanges. Protection for funds is provided via Nexus Mutual, so users can have high confidence their BTC will stay safe.
The tBTC project isn’t just a BTC-ETH bridge — it can also enable safe access to other blockchains, and has already done so with Celo. The teams behind tBTC plan to establish bridges to additional blockchains over time, extending the options bitcoin holders have to use their bitcoin safely across different platforms.
The tBTC project has seen strong adoption since launch, and has received support from prominent figures in the crypto community: Scalar Capital’s Linda Xie, Synthetix’s Kain Warwick, TokenSoft’s Mason Borda, Aragon’s Luis Cuende, and more, have said they plan to use tBTC as their BTC-ETH bridge, while tBTC integrations already include Matcha, UMA, and FalconX as of December 2020. This strong support indicates the demand for a safe, decentralized, and permissionless BTC-ETH bridge and the community’s confidence in tBTC.
DeFi, like the entire crypto economy, is growing and evolving rapidly. It’s essential that Bitcoin, the leading cryptocurrency, be interoperable with the many innovative projects gaining traction on Ethereum. It’s equally crucial that any network that brings bitcoin to other blockchains be safe, secure, and efficient. The tBTC project is fulfilling the promise of a secure, trustless, and decentralized solution for bringing bitcoin into the DeFi ecosystem.
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Matt Luongo is the founder and CEO of Thesis, a venture production studio. The first products of Thesis are Fold, a consumer payment app, and Keep, the builders of tBTC, which is a safe and permissionless bridge for Bitcoin holders to earn on Ethereum.
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