Keep Network to Launch An Updated Bitcoin to Ethereum Bridge, tBTC Protocol V2

Keep Network to Launch An Updated Bitcoin to Ethereum Bridge, tBTC Protocol V2

The Keep Network has released more details of tBTC, a Bitcoin bridge on Ethereum. Keep Network developer Evandro Saturnino disclosed this in a blog post.

Keep Network Unveils tBTC V2

Saturnino made it known that the network considered different changes to address tBTC past issues with collateralization.

The developer said that while the tBTC v1 relies on a 200% outside collateral, it has struggled to scale without more ETH into the network, despite being on top of $300M Total Locked Value (TVL). He said the system works perfectly, but the economic constraints are still present.

This second iteration of tBTC (v2) is expected to require stakers to only lock up Keep rather than both Keep and Ether (ETH), alongside introducing changes to its wallet-generation mechanism.

tBTC is a fully Bitcoin-backed ERC-20 token pegged to the price of Bitcoin. It facilitates Bitcoin holders acting on the Ethereum blockchain, accessing the decentralized finance (DeFi) ecosystem, and earning with their Bitcoin.

The network is fully trustless, using a system of “signers” selected by a random beacon to safeguard the deposited BTC. tBTC can be converted to BTC, and vice versa, at any time, with no intermediary needed to sign off.

According to Saturnino, this v2 of tBTC would greatly decrease the staking assets’ collateral ratio.

He added that insurance coverage pools would be used to protect against malicious validators to neutralize risks to the peg. He described the coverage pools as perfectly suited to ensure against fraud in tBTC v2.

tBTC And Existing Bitcoin Tokenized Solutions

First announced in April last year, tBTC was built as an application to allow trustless storage of the Bitcoin-backed tBTC tokens. It was officially launched in May but had issues with a smart contract bug, after which it relaunched in September 2020.

The developer said the team had learned a lot since the protocol launched the second time.

The tBTC protocol works on both the Bitcoin and Ethereum public blockchains, with users locking up BTC so that nodes in the Keep network can mint tBTC while staking 150% of the BTC’s value in ETH.

Bringing Bitcoin to Ethereum is considered to be an exciting prospect by many as the tokenization of Bitcoin gets increasingly popular. It can be split into custodial and non-custodial. Popular custodial solutions like Wrapped BTC (wBTC) are one of the largest, while non-custodial solutions like renBTC have followed closely since its launch last year May.

Meanwhile, the Keep network’s tBTC is still trying to gain ground among DeFi users.

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Author: Jimmy Aki

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