Threshold Network Upgrades tBTC Bridge: A Boost for Bitcoin in Decentralized Finance

Threshold Network Revamps its tBTC Bridge for Institutional Crypto Investment

Threshold Network, celebrated for its crosschain bridge infrastructure hub role in enabling Bitcoin to move across different blockchains, has recently taken a quantum leap by upgrading its tBTC bridge. This move is cleverly designed to make it more accommodating for large investors wanting to utilize Bitcoin in decentralized finance, also known as DeFi. This news serves as a very exciting development in the field of crypto finance, opening up new opportunities for traditional finance institutions to take advantage of digital currencies.

The tBTC Bridge Upgrade

The recent advancement in the tBTC bridge is more than just an upgrade. This is as it promises to make institutional usage of Bitcoin in DeFi seamless. Interestingly, institutional entities such as ETFs, hedge funds, and custodians can now conveniently deploy their Bitcoin in DeFi. This will either be to earn yield or provide liquidity, and they can do this without the need to remove it from regulated storage. This novel initiative is supported by a press release shared with The Defiant. According to Threshold Network, before this notable upgrade, most institutional Bitcoin was kept locked in vaults due to stringent compliance and insurance regulations.

A New Architecture for tBTC

Revelations from Threshold Network suggest that the upgrade is expected to deliver to tBTC a new architecture. This structure would connect directly to regulated custodians, thereby allowing institutions to mint tokenized Bitcoin without the need to physically move out of insured storage. MacLane Wilkison, co-founder and CEO of Threshold Labs, the company behind the Threshold Network, mentioned that since U.S. spot ETF approvals, there has been a significant increase in institutional participation in Bitcoin. He noted, “Institutions now hold more than $400 billion in BTC, corporate reserves increased 40% in Q3 to $117 billion, and ETFs represent nearly 7% of the assets market cap.

tBTC Minting and Redemption

With the help of the upgrade, institutions can now mint tBTC in a single transaction without incurring any gas fees. Additionally, they can redeem it instantly back into Bitcoin. The bridge provides support to several blockchains including Ethereum, Arbitrum, Base Layer, Polygon, Starknet, and Optimism. Percentage-wise, Bitcoin has accumulated over $7.7 billion in the DeFi ecosystem, which represents a 6.7% share of the market. This figure stands behind the BNB Chain, Solana, and Ethereum, which claim a share over $7.8 billion, $10.4 billion, and $77.2 billion in DeFi, respectively.

Significant Successes for the Threshold Network

Thus far, Threshold Network has seen significant successes in its operations. It has successfully processed over $4.2 billion in Bitcoin bridge volume and currently holds over $640 million in total value locked as per the information confirmed by DefiLlama. This significant value keeps it as the third-largest DeFi project in the Bitcoin DeFi space. This overall hierarchy finds only Babylon Protocol with over $5.9 billion in Total Value Locked (TVL) and Lombard with more than $1.2 billion in TVL ahead of it.