Threshold Network has joined forces with cross-chain token protocol Wormhole to establish an innovative solution for easy tokenized Bitcoin (BTC) movement across 20 blockchain ecosystems. The integration aims to eliminate the reliance on centralized bridges, ensuring enhanced security for token holders.
Wormhole proposed the integration to the Threshold community, seeking to establish threshold bitcoin (tBTC) as the leading representative token for Bitcoin within on-chain DeFi ecosystems. After gaining strong community support and receiving full approval through a governance vote on April 29, the collaboration between Wormhole and Threshold Network was set in motion.
tBTC, a Bitcoin-backed token enabling access to the Ethereum and cross-chain DeFi ecosystem, is fully backed by 1 bitcoin held in reserve. Through the Wormhole integration, tBTC can be seamlessly transferred to Ethereum Virtual Machine (EVM) chains like Arbitrum, Optimism, Polygon, as well as non-EVM chains including Solana, Aptos, Sui, and Cosmos.
Previously, using Bitcoin on other networks required the reliance on centralized bridges, which posed risks to token holders. The Wormhole bridging plan introduces an efficient method for bridging ERC-20 tokens by minting tBTC on Ethereum instead of creating wrapped tokens for each chain. This approach preserves liquidity and reduces centralization risks, ensuring a safer adoption of BTC in on-chain DeFi.
Moreover, the collaboration involves the Threshold DAO launching a cross-chain liquidity bootstrapping operation, aiming to attract up to 26,000 BTC in deposits. Experienced liquidity providers will seed tBTC liquidity in key ecosystems and gain the option to purchase Threshold's native t (T) tokens worth approximately $20 million at or above the spot price.
The Threshold Network and Wormhole integration paves the way for seamless Bitcoin bridging across multiple blockchain ecosystems, opening up new opportunities for decentralized finance and enhancing accessibility for tokenized Bitcoin holders.
