Changing the Game with Trustless Pegs
Wrapped Bitcoin, or wBTC, is a popular solution which pins Bitcoin’s price peg on an ERC-20 token. The only problem is that minting the wrapped version requires a user to undergo KYC and mint it from a network partner.
Adding to these woes, wBTC is held in a custodial manner by partner exchanges. Even if users were to acquire wBTC on Uniswap or Kyber in a non-custodial fashion, there are still inherent custodial risks.
A trustless recreation of BTC on Ethereum has been a pipe dream for some time despite several attempts. Synthetix’s issued sBTC cannot be used in DeFi applications, for instance. It is meant to be a synthetic asset that gives investors exposure to Bitcoin’s price movements.
tBTC is finally looking to put an end to that.
On the surface, tBTC creates a decentralized issuance mechanism with two parties. The party that wants tBTC, the token minted by the tBTC network, sends a requisite amount of Bitcoin to the other party’s address. In return, this party, called the “signer,” mints tBTC and sends it to the other side.
There are two ways in which tBTC can be minted: a non-fungible token (NFT), TDT (tBTC Deposit Token) or a tBTC, the fungible BTC derivative token. Read More...