Article Highlights
- Threshold launches a significant upgrade to its tBTC bridge.
- Aims to attract institutions to deploy billions of dollars in Bitcoin into DeFi.
- The upgrade streamlines the process for institutions to mint tBTC directly to supported chains.
- Eliminates gas fees and secondary approvals.
- Redemptions back to the Bitcoin network are equally straightforward.
- tBTC is verifiably backed 1:1 by Bitcoin.
- Designed to enhance liquidity in DeFi and enable sustainable yields.
Introduction
Threshold, a leading crypto infrastructure platform, has announced a substantial upgrade to its tBTC bridge. This upgrade is designed to incentivize institutions holding significant Bitcoin (BTC) reserves to allocate them to decentralized finance (DeFi) protocols by simplifying the onboarding process and reducing associated costs.
Details of the New Upgrade
The latest iteration allows institutions to mint tBTC directly to supported blockchains in a single Bitcoin transaction, eliminating the need for secondary approvals and incurring no gas fees. Furthermore, the redemption process back to the Bitcoin network has been streamlined for enhanced user experience. Rizza Carla Ramos, Head of Marketing at Threshold, emphasized in an interview that these improvements could motivate institutions to leverage their Bitcoin holdings in DeFi rather than passively holding and awaiting price appreciation.
Why Should Institutions Use DeFi?
Ramos explained that institutions are actively seeking lending opportunities and avenues to generate yields on their Bitcoin assets. Instead of merely holding Bitcoin in wallets and anticipating future gains, institutions can now utilize their holdings to generate profits.
"We want to elevate Bitcoin finance to the next level by empowering institutions to engage with this segment of the market on-chain," Ramos stated.
How tBTC Works
Each tBTC minted is verifiably backed 1:1 by Bitcoin, eliminating the need for intermediaries or custodial risks. This is achieved through the implementation of a 51-of-100 threshold signing model, enabling over $500 million in institutional and whale-held Bitcoin to be deployed across blockchains such as Ethereum, Arbitrum, Base, Polygon, Sui, and others in pursuit of DeFi opportunities.
Competition in the Bitcoin Bridge Market
Threshold competes with Wrapped Bitcoin (WBTC) and renBTC (RENBTC), which have recorded considerably higher trading volumes. However, WBTC and RENBTC rely on a more centralized model to facilitate Bitcoin transfers across different blockchains.
Bitcoin Supports DeFi
Threshold maintains that tBTC will bolster the DeFi ecosystem by increasing liquidity in decentralized exchange pools and lending protocols, while concurrently facilitating more sustainable yield generation.
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