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tBTC 101

2020-03-09

tBTC is a sidechain designed to allow BTC holders a way to earn yield with their Bitcoin trustlessly, using decentralized finance (DeFi) applications.

3 steps to earn with your BTC

TBTC is an ERC-20 token fully backed by BTC. Currently live on the Ropsten testnet, TBTC lets people use BTC in DeFi apps to take out stablecoin loans, earn BTC-denominated interest, and more.

The goal of tBTC is to give BTC the expressiveness of a smart contract platform. tBTC makes it possible to use Bitcoin to act on Ethereum in three simple steps:

  1. Take BTC
  2. Call upon a “signers’ group” to hold the BTC
  3. Once your BTC deposit is confirmed, receive TBTC at a peg of 1:1

The process in reverse is known as Redemption.

tBTC is open source

TBTC, built by the teams at Summa and Keep to the highest standards of cryptography, is fully open source. It uses an elliptic curve signature algorithm called t-ECDSA -- a more secure alternative to multisig that requires less space on chain.

Signers’ groups

tBTC uses a system of “signers’ groups” to process transactions without a trusted middleman. Signers operate in groups of three. All three signers must approve a transaction for it to proceed. Signers receive a fee of 20 basis points (bps) for every tBTC minted.

To ensure honest behavior, tBTC uses a random beacon to select signers, who must post a “bond” equal to 150% of the amount of BTC being deposited by the user. The bonded ETH is swapped for TBTC and can then in turn be redeemed for BTC in the case of stolen funds.

TBTC is fully backed by Bitcoin at a rate of 1:1.

Use BTC on Ethereum

Bitcoin accounts for most of the crypto assets in the world on a value basis, but Ethereum allows for more complex financial applications such as on-chain lending. tBTC lets people deploy their BTC into these DeFi use cases and other projects, where they have the opportunity to earn without selling.

Stay up to date

Join the tBTC mailing list for updates, including information about tBTC’s upcoming launch on Ethereum mainnet and opportunities to participate.

To learn more about tBTC’s technical design, read the technical spec. Join the Keep #tbtc channel on Discord for technical questions about tBTC and tbtc.js.

Follow #tBTC on Twitter for news and opportunities to participate.