Summary:
- Keep and NuCypher recently merged networks to create Threshold Network
- tBTC v2 is launching on the Threshold Network
- Open new [tBTC v2, [sBTC]] Metapool on Curve
- Switch Gauge and incentives from tBTC v1 pool to new tBTC v2 pool
- Open a future DAO proposal on Threshold network to add extra incentives in T to the new pool
- Set up a Threshold x Curve community AMA to discuss tBTC v2
Abstract:
What is the tBTC v2 token?
tBTC v2 is the ERC-20 token created from our upcoming bridging protocol (the tBTC v2 Bridge) on the Threshold Network — the network formed from the merger of Keep Network and NuCypher. This protocol will have 100x the scalability of the original tBTC v1 protocol. In addition to its intrinsic trustlessness and transparency, tBTC v2 will compete with WBTC when it comes to liquidity, convenience, and speed. This is the first step of a 6 month process for safely phasing out the tBTC v1 token and bridging and migrating to tBTC v2.
Through the tBTC Token Upgrade Portal the upgrade process is really simple: it upgrades tBTC v1 to tBTC v2 and downgrades tBTC v2 to tBTC v1. This means that every minted tBTC v2 token is backed by tBTC v1 tokens held in the vending machine contract. These v1 tokens are backed by BTC held by the tBTC v1 Bridge created for the deposit.
When the tBTC v2 Bridge is launched on the Threshold Network after Keep Network’s merge with NuCypher, anyone will be able to mint tBTC v2 simply by depositing BTC. This will be similar to minting tBTC v1, but simpler, cheaper, and with no foreseeable upper limit on minting. Our v2 tBTC bridge will be as convenient and easy to use as WBTC, but trustless and transparent — unlike anything else on the market.
Once the tBTC v2 bridge is released users will be able to mint tBTC v2 directly with BTC. This means tBTC v2 will always be backed by either BTC or tBTC v1 that is in turn backed by BTC.
Background on TBTC
→ tBTC is a fully trustless, decentralized and censorship-resistant asset bridge between bitcoin and ethereum blockchains. It is built to give Bitcoin the capabilities of Ethereum and bring additional collateral to DeFi. The asset (tBTC) is an ERC-20 pegged to Bitcoin, it can be minted or redeemed for BTC by anyone and without intermediaries. Being live and without incidents for a whole year, reassures that in spite of being a cornerstone of advanced cryptographic achievements tBTC works as intended.
→ Its only drawback in v1 proved to be its scalability. Capital intensity imposed restrictions on the system’s ability to grow beyond a certain point.
→ tBTCv2 addresses this drawback while respecting, in fact enhancing the trustless, decentralized features of v1.
- To overcome capital inefficiencies of v1 an assumption is introduced in v2 that’s common in other areas of cryptography (bitcoin and ethereum blockchains e.g.) — an honest majority assumption.
- Based on that, tBTC is being re-architected in the following way:
- Instead of 3-of-3 wallets, each wallet will have sets of at least 100 signers with a threshold of 51, picked randomly from a pool of ~2000 signers active in Threshold Network.
- Instead of one wallet per deposit, the system generates a new wallet roughly every day to week, depending on # of deposits.
- Instead of stakers putting down KEEP and ETH, they only stake KEEP.
- These actions provide a way to greatly decrease the collateral ratio, and capital need, of the staking assets but it’s also not risk-free. In the (statistically unlikely) event enough signers in a set collude, there’s an additional insurance backstop called Coverage Pools.
- Coverage pools consist of cryptoassets that are deposited by tokenholders to insure against fraud while earning yield. l
- This dual approach overcomes scalability issues and capital constraints of v1, and while preserving censorship-resistant and trustlessness it will allow v2 to become an immensely scalable asset bridge.
- In short, v2 makes tBTC a viable competitor to wBTC on an economic basis, but entirely permissionless and decentralized.
Motivation:
These are the five topics included in the present proposal which we want to discuss and get approved through the Curve Governance Process:
- Upgrade/Migrate current [tBTC, [sBTC]] Metapool to a new [tBTC v2, [sBTC]] Metapool.
- Switch Gauge and Incentives from old v1 metapool to new v2 metapool
- Open a future DAO proposal on Threshold network to add extra incentives in T to the new v2 Metapool.
- Set up a Threshold x Curve community AMA to discuss tBTC v2
- Explore joint marketing and collaboration opportunities:
→ Joint marketing efforts
→ Add CRV assets to Coverage Pools. CP are part of the tBTCv2 system and with outside capital act as a backstop of the system. Investors earn fees in return to provide capital to Coverage Pools.