The cryptocurrency infrastructure platform Threshold has launched an important upgrade to the tBTC bridge, aimed at attracting institutions to deploy billions of dollars in Bitcoin into decentralized finance protocols.
The latest upgrade from Threshold allows institutions to mint tBTC directly on supported chains through a single Bitcoin transaction, without the need for secondary approval or gas fees, while redeeming back to the Bitcoin network is equally straightforward, as stated by Threshold.
Rizza Carla Ramos, Head of Market at Threshold, further explained in an interview with Cointelegraph at the Web Summit in Lisbon this week that these feature improvements are expected to incentivize more Bitcoin-holding institutions to utilize their assets for DeFi, rather than simply letting them sit idle waiting for appreciation:
“They will want to lend, they will want to earn yields, because if they are long-term investors in Bitcoin, you certainly don’t want it just sitting there quietly, right?
“This is how we will build the next financial layer for Bitcoin, by allowing institutions to bring this part of the market on-chain,” she added.
Each minted tBTC is backed by 1:1 real Bitcoin without the need for intermediaries or custodial risks, ensuring that at least 51 of the 100 Bitcoin node operators must sign off for a transaction to be valid through a threshold mechanism. This means that Bitcoin held by institutions and whales, amounting to over $500 billion, is expected to migrate to blockchains like Ethereum, Arbitrum, Base, Polygon, and Sui to participate in DeFi opportunities.
Since its launch five years ago, the total cross-chain transaction volume of the Threshold tBTC bridge has exceeded $4.2 billion.
The protocol competes with Wrapped Bitcoin (WBTC) and renBTC (RENBTC), the latter two having larger transaction volumes but utilizing a more centralized model for Bitcoin cross-chain transfers.
WBTC also announced on Thursday its expansion to Hedera, bringing more liquidity and Bitcoin asset tokenization opportunities to this high-speed public chain.
Threshold also stated that tBTC can enhance the resilience of the decentralized finance ecosystem, with Bitcoin deepening liquidity in decentralized trading pools and lending protocols, and providing a more sustainable yield space.
Related: Bitfarms' stock plummets 18% after announcing gradual closure of Bitcoin (BTC) mining operations.
Original article: “Threshold: Upgrading the Bridge Protocol to Facilitate $500 Billion Institutional Bitcoin (BTC) Flow into DeFi”
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