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Threshold Network Collaborates with Wormhole to Enable Bitcoin Bridging Across 20 Blockchains

Threshold Network has partnered with cross-chain token protocol Wormhole to facilitate the seamless transfer of tokenized representations of Bitcoin (BTC) across approximately 20 blockchain ecosystems. This collaboration aims to eliminate the need for centralized bridges, which previously posed risks for token holders when using Bitcoin on other networks. The integration of Wormhole's technology will enable the movement of tBTC (threshold Bitcoin), a Bitcoin-backed token, to both Ethereum Virtual Machine (EVM) chains like Arbitrum, Optimism, and Polygon, as well as non-EVM chains such as Solana, Aptos, Sui, and Cosmos.

authorsdiary13 May 20231 Mins read36 Views

tBTC and the Benefits of Wormhole Integration:

tBTC serves as a tokenized representation of Bitcoin, allowing users to access Ethereum and cross-chain decentralized finance (DeFi) ecosystems. Each tBTC token is fully backed by one Bitcoin held in reserve. The integration of Wormhole’s technology will provide a secure and efficient means of transferring tBTC to various blockchain networks, removing the need for centralized bridges that pose security risks to token holders. This collaboration is expected to enhance the adoption and utility of tBTC within the on-chain DeFi space.

Eliminating Centralization Risks and Improving Liquidity:

Traditionally, using Bitcoin on other networks required the reliance on centralized bridges, which introduced centralization risks and vulnerabilities. Wormhole’s bridging plan introduces a new method for bridging ERC-20 tokens, leveraging efficient capital deployment to Ethereum sidechains. Rather than creating wrapped tokens for each chain, which can tie up valuable liquidity, tBTC will be minted on Ethereum. Subsequently, a canonical token, native to each ecosystem, will be deployed on respective chains. This approach preserves the integrity of the tBTC supply and confines risks within local ecosystems.

Addressing Centralization Risks in DeFi:

The integration of Wormhole’s technology with tBTC addresses historical centralization risks associated with wrapped Bitcoin. These risks have hindered the broader and secure adoption of BTC within on-chain DeFi. By enabling direct transfers of tBTC to multiple blockchain ecosystems, this collaboration mitigates centralization concerns and fosters the safe utilization of BTC in the DeFi space.

SUMMARY

Threshold Network and Wormhole’s partnership will enable the seamless transfer of tBTC, a tokenized representation of Bitcoin, across various blockchain ecosystems. By leveraging Wormhole’s technology, tBTC holders can securely access both EVM and non-EVM chains, eliminating the need for centralized bridges and minimizing associated risks. This integration enhances the adoption of tBTC in on-chain DeFi and provides a more decentralized and efficient approach to utilizing Bitcoin across multiple networks.