Authors: @FREDY - Contributor and Threshold Committee member / @Ethan - tLabs Head of Business Development
Date: 2025-05-30
Summary
This proposal seeks to onboard tBTC to Aave v3 on Base following a successful launch on Mainnet (Aave - Open Source Liquidity Protocol).
As proposals for onboarding assets already onboarded in other Aave instances does not require a TEMP CHECK it is presented as an Aave Request for Comment (ARFC).
Motivation/Background
tBTC is Threshold’s decentralized and permissionless bridge to bring BTC to Ethereum, Base and 7 other chains. Users wishing to utilize their Bitcoin on Ethereum & Base can use the tBTC decentralized bridge to deposit their Bitcoin into the system and get a minted tBTC token in their EVM wallet.
Threshold Network has recently brought direct minting of tBTC to Arbitrum and Base. It is live on Aave, Compound, GMX, EigenLayer, Synthetix, Morpho, Symbiotic and has strong, sticky liquidity to support liquidations.
Following its approval on AAVE 3 Ethereum, tBTC’s initial supply cap was reached within 72 hours, prompting an increase to meet the overwhelming demand and now sits at over 2,200 BTC TVL. This rapid adoption underscores the market’s appetite for trust-minimized BTC solutions in DeFi.
tBTC on AAVE v3 Arbitrum is just lacking an AIP and has already passed on ARFC and relevant risk analysis.
tBTC on Base has a current supply of 116 BTC worth $12M at current price.
Benefits for Aave
- High User Demand, since its initial deployment on Aave’s Ethereum market, tBTC reached its initial 500 BTC supply cap within the first week. The cap has been increased multiple times, now sitting at 2200 BTC, highlighting strong user interest. Something we hope to replicate on Base.
- Easy, direct onboarding of BTC capital via Threshold’s Base direct minting.
- Further decentralization and trust minimisation in the Aave stack.
- A range of lending options for those who wish to earn yield on their BTC.
- Preferable yields on tBTC through active incentive participation, boosting Aave protocol use, fees and TVL.
Specification
Ticker: TBTC
Contract Address:
Base: 0x236aa50979D5f3De3Bd1Eeb40E81137F22ab794b
Chainlink Oracle:
Base: 0x6D75BFB5A5885f841b132198C9f0bE8c872057BF
Useful Links:
Project: https: //www.threshold.network/
Minting Dashboard: https://dashboard.threshold.network/tBTC/mint
Bridge to other Chains: Portal Token Bridge | Fast and Secure Cross-Chain Transfers
GitHub: GitHub - threshold-network/tbtc-v2: Trustlessly tokenized Bitcoin everywhere, version 2
Docs: tBTC Bitcoin Bridge | Threshold Docs
Audit: About
Immunfi Bug Bounty: Threshold Network Bug Bounties | Immunefi
Llama Risk Report: Collateral Risk Assessment: Threshold BTC (tBTC) - HackMD
Twitter: https://twitter.com/thetnetwork
Discord: Threshold Network ✜
Dune: https://dune.com/threshold/tbtc
https://dune.com/sensecapital/tbtc-liquidity
What is the link between the author of the ARFC and the Asset?
Authors are community members and contributors of Threshold DAO. Authors are not compensated to present this ARFC proposal.
Provide a brief high-level overview of the project and the token.
tBTC is a decentralized wrapped Bitcoin that is 1:1 backed by native BTC. Unlike other wrapped Bitcoins, the BTC that backs tBTC is not held by a central intermediary, but is instead held by a decentralized network of nodes using threshold cryptography.
tBTC is trust minimized and redeemable for native BTC without a centralized custodian. It can be used across the entire DeFi ecosystem.
tBTC can be used as collateral, liquidity, a store of value, and can be integrated with DeFi apps across all supported blockchains.
As with other BTC wrappers, tBTC provides cryptocurrency traders and general users with a BTC-pegged token, that can be used to generate yield whilst holding native BTC.
Explain the positioning of the token in the AAVE ecosystem. Why would it be a good borrow or collateral asset?
Adding support for tBTC on Aave v3 (Base) as an asset would allow tBTC holders to obtain a yield on their BTC and get access to stables without selling their underlying Bitcoin.
tBTC is the only way to permissionlessly borrow and lend BTC in a decentralized manner. This gives Aave direct access to the 2.2 trillion market of BTC, for which centralised competitors provide limited access to.
Provide a brief history of the project and the different components: DAO (is it live?), products (are they live?). How did it overcome some of the challenges it faced?
tBTC was launched in May 2020 as a decentralized Bitcoin bridge on Ethereum by an effort of contributors. It was developed initially by Keep Network in collaboration with Summa and was designed to use a system of bonded operators to secure BTC deposits via a random beacon and threshold cryptography.
tBTC is now developed under the Threshold Network DAO. It extensively utilises the Threshold Network’s threshold cryptography to create a secure BTC asset. tBTC is a product launched on Threshold Network, on which many other decentralized applications are being built.
Threshold Network DAO was born out of the first on-chain merger between two decentralized protocols, Keep Network and NuCypher early in 2022. The DAO has successfully operated since that time, and supports an active community of contributors that work towards building tBTC liquidity and usability.
How is tBTC currently used?
tBTC is used across a variety of chains and use cases. Some key utilities include Aave, Maker (Spark), GMX, EigenLayer, Synthetix, Morpho, Symbiotic, collateral asset for crvUSD, thUSD and solvBTC.
A comprehensible list can be found here:
https://defillama.com/yields?token=TBTC 4 & Earn yield on your Bitcoin | Linktree
Emission schedule
tBTC is one-to-one backed with real Bitcoin, meaning that there isn’t an emissions schedule, but a mint and redeem function that adjusts the supply of tBTC based on native BTC coming into and out of the system.
Token (& Protocol) permissions (minting) and upgradability. Is there a multisig? What can it do? Who are the signers?
For tBTC, wallets are created periodically based on governance. In order for the wallet to move funds, it produces signatures using a Threshold Elliptic Curve Digital Signature Algorithm, requiring 51-of-100 Signers to cooperate. The 100 signers on each wallet are chosen with our Sortition Pool, and the randomness is provided by the Random Beacon. More can be found here - Wallet Generation | Threshold Docs
The Threshold Council multisig is a 6/9 Gnosis Safe multisig with 9 unique signers that form the Threshold Network Committee. The Council has limited upgrade privileges over the smart contracts. However, those privileges do not include any custodial power over deposited BTC.
Council Multisig Ethereum Address:
0x9F6e831c8F8939DC0C830C6e492e7cEf4f9C2F5f
Council Multisig Base Address:
0x518385dd31289F1000fE6382b0C65df4d1Cd3bfC
Market data (Market Cap, 24h Volume, Volatility, Exchanges, Maturity)
Market capitalisation: $490m USD / 4,678 BTC (Ethereum) and $12M / 116 BTC (Base)
Decentralized exchange liquidity pools: https://defillama.com/yields?token=TBTC
Dashboard on Decentralized LP liquidity: https://dune.com/sensecapital/tbtc-liquidity
Social channels data (Size of communities, activity on Github)
Discord: 10,175
Twitter: 38,400
Github: 4,596 commits
Number of transactions: 2.393.648 (across all chains)
Number of token holders: 15.918 (across all chains)
Risk parameters
We suggest waiting for the feedback from risk teams for suggested parameters.
Symbol: TBTC
Base Contract Address: 0x236aa50979D5f3De3Bd1Eeb40E81137F22ab794b
Market Risk Assessment
Maximum and current market cap of the token within the last 6 months on Base.
Max: $47,046,750 or 447 BTC
Current: $12,000,000 or 116 BTC
The largest exchanges where the token is listed and its respective liquidity on Base
Aerodrome tBTC/cbBTC Concentrated pool with 8,590,951 USD TVL
Aerodrome tBTC/cbBTC Basic Stable pool with 1,926,524 USD TVL
Aerodrome tBTC/USDC pool with 706,832 USD TVL
Aerodrome tBTC/WETH pool with 555,738 USD TVL
Aerodrome tBTC/USDC pool with 462,554 USD TVL
Aerodrome tBTC/WETH pool with 408,255 USD TVL
Aerodrome tBTC-/USDbC pool with 54,398 USD TVL
Aerodrome CL200-tBTC/T pool with 45,293 USD TVL
Curve Finance tricypto tBTC/ETH/crvUSD pool with 1,260,454 USD TVL
Pancakeswap tBTC/cbBTC pool with 84,506 USD TVL
Pancakeswap tBTC/WETH pool with 12,055 USD TVL
Liquidity example with no significant price impact
Disclaimer:
This proposal is powered by Threshold Network. The authors are FREDY (Contributor and Threshold Committee member) and @Ethan (tLabs Head of Business Development)
Next Steps:
- Since proposals for onboarding assets already onboarded in other Aave instance does not require a TEMP CHECK it can go straight to an Aave Request for Comment (ARFC).
- Publication of this ARFC, collect community and service providers feedback before escalating the proposal to the ARFC Snapshot stage.
- If the ARFC Snapshot outcome is positive, publish an AIP vote for final confirmation and enforcement of the proposal.
Copyright:
Copyright and related rights waived under Deed - CC0 1.0 Universal - Creative Commons