Summary
LlamaRisk supports onboarding tBTC to Aave V3 on Base. Our analysis indicates a similar risk profile of Base tBTC to its Arbitrum version, and we are tentatively in favor of onboarding. However, the relatively low onchain circulating supply would require a limited initial supply cap of up to 100 BTC (~$10M). Given this limited capacity, it remains unclear whether the demand would justify the DAO’s operational efforts.
Price deviations between tBTC and BTC have been observed in secondary markets (notably Aerodrome pools), at times exceeding a few percent. This highlights the need to price the asset using Chainlink’s BTC/USD feed, consistent with practices on Ethereum, to reduce the risk of manipulation. While the tBTC v2 contracts have undergone multiple audits, the Base-specific cross-chain components have not been publicly audited. The system’s reliance on permissioned Beta Stakers, Minters, and Guardians also introduces operational risks that could disrupt the minting or deposit process.
The exact risk parameters will be presented jointly with @ChaosLabs.
1. Asset Fundamental Characteristics
1.1 Asset
tBTC (Threshold Bitcoin) is an ERC-20 token backed by Bitcoin 1:1 and pegged to its price. Unlike wBTC, which relies on a centralized custodian, tBTC uses a permissioned signer group that participates in a consensus mechanism to custody the Bitcoin backing it, reducing dependence on centralized third-party custodians. On Base it is deployed at the address 0x236aa50979D5f3De3Bd1Eeb40E81137F22ab794b. As of June 3, 2025, tBTC has a circulating supply of 139 on Base, representing a market capitalization of $14.75M. The token was deployed on August 3, 2023, and does not offer any yield.
Deposits typically take 1-3 hours to be processed and credited. Withdrawals follow a similar process: the tBTC token contract burns the tBTC, and the DepositBridge transfers BTC to the user’s specified Bitcoin address. This process includes a 3-5 hour processing delay. The platform fees are action-based, with no fee for minting and a 0.2% redemption fee. The accrued tBTC fees are periodically deposited into Threshold-owned Governor Bravo Timelock Controller on the mainnet.
1.2 Architecture
tBTC is a decentralized and permissionless alternative to wrapped Bitcoin tokens, where BTC is held not by a centralized custodian but by a distributed network of Threshold node operators. Users initiate the minting process by sending BTC to a one-time-use deposit address. Once the Bitcoin is moved from the deposit address, it goes to a randomly generated wallet by Threshold stakers in Bitcoin wallets controlled by signers participating in the Threshold ECDSA, which requires 51% of 100 signers to cooperate and sign the transaction. Though the Network operates on Ethereum, signers use an off-chain communication protocol called “libp2p” to coordinate signing events. On each wallet, 100 signers are selected randomly from Keep Network’s Sortition Pool. Random Beacon securely generates random numbers and is used with Threshold Cryptography to impart bias-resistant randomness and thus distribute trust across multiple nodes.
Source: List of tBTC Guardians and Minters, Threshold
Signers are stakers of the Threshold Network’s “T” token, and selection is weighted by stake. Currently, a restricted group of Beta Stakers is used for optimistic minting to reduce signer failures, but the network aims to open access to all qualifying stakers. Guardians and Minters are permissioned roles: Minters approve BTC deposits required for tBTC minting, while Guardians can veto them, introducing centralization risk. To mitigate this, a planned “Sweeping” mechanism would allow signers to bypass Guardian approval by enabling minting from unapproved deposits every 8 hours at regular intervals.
tBTC can be supplied to Base via two methods: native minting or bridging from Ethereum:
- In native minting, users deposit BTC into Threshold’s custody on Bitcoin L1, which triggers minting of tBTC directly on Base. This mechanism is designed to allow users to obtain Base-native tBTC without the need to interact with the Ethereum L1 tBTC ledger where minting occurs. Instead, the process is handled by off-chain relayers that submit mint-related calls to the L1BitcoinDepositor contract on Ethereum. These contracts then use the Wormhole protocol to send the minted L1 tBTC to Base, where it is unwrapped into canonical Base tBTC by the BaseWormholeGateway and the L2BitcoinDepositor.
- In the bridging method, tBTC is first minted or held on Ethereum and then locked into the Wormhole bridge. The BaseWormholeRelayer plays a key role here, it unwraps the Wormhole-wrapped tBTC received from Ethereum and mints the canonical tBTC on Base. The former method is more economical as users receive tBTC directly on Base, without needing to pay Ethereum gas fees.
Redemption requires burning tBTC via the tBTC token contract, after which the BridgeRouter facilitates BTC transfer from a redemption wallet to the user’s provided Bitcoin address. Redemptions have a size limit (based on wallet capacity) and a processing delay of 3-5 hours.
1.3 Tokenomics
tBTC represents 3.4% of the total BTC wrappers supply on Ethereum. Similarly, tBTC on Base is an extension of this product, with a total supply of 139 tBTC, representing 2.73% of tBTC’s total supply (4613.6 tBTC).
1.3.1 Token Holder Concentration
Source: tBTC Top 100 Holders on Base, BaseScan, June 3, 2025
The top 5 holders of tBTC are:
- Aerodrome CLPool: 38.53% of the total supply.
- Solv Protocol: 21.05% of the total supply.
- Moonwell tBTC (mtBTC): 8.51% of the total supply.
- Aerodrome Stable AMM tBTC/cbBTC: 5.04% of the total supply.
- Curve TriCrypto Pool: 3.23% of the total supply.
The majority of existing tBTC on Base is supplied to various DEXs, which positively contributes to its liquidity. However, that makes the top 10 holders to collectively own 87.2% of the supply, resulting in a high concentration.
2. Market Risk
2.1 Liquidity
Source: tBTC/USDC Swap Liquidity, DeFiLlama, June 3, 2025
Users can swap up to 48 tBTC ($5.08M) for USDC on Base within a 7.5% price impact.
2.1.1 Liquidity Venue Concentration
Source: Top tBTC Liquidity Pools on Base by Volume, GeckoTerminal, June 3, 2025
There are numerous tBTC pools available on Base with considerable liquidity (>$100K). However most of tBTC’s liquidity is supplied by the Aerodrome tBTC/cbBTC Concentrated Stable pool ($8.73M TVL) followed by Curve tricrypto crvUSD/tBTC/ETH pool ($1.43M TVL) and Aerodrome tBTC/cbBTC Basic Stable pool ($1.35M TVL).
2.1.2 DEX LP Concentration
tBTC’s DEX liquidity on Base is moderately concentrated, primarily supplied through yield optimizers like Beefy and YO, which are incentivized with yield boosts. This introduces a low risk of liquidity decline if the incentives are removed. Below is the breakdown (as of June 3, 2025):
- Aerodrome tBTC/cbBTC Concentrated Stable: The top liquidity provider is YO Protocol, supplying 29.5% of the pool’s liquidity.
- Curve tricrypto crvUSD/tBTC/ETH: 23.7% of the pool’s liquidity is supplied by Beefy.
- Aerodrome tBTC/cbBTC Basic Stable: 70.86% of the pool’s liquidity is supplied by Beefy.
2.2 Volatility
Source: tBTC/BTC Secondary Market Rate, TradingView, June 3, 2025
The chart above shows that tBTC’s price on Base has deviated from BTC by over 5% on several occasions. Notably, the tBTC/cbBTC pool on Aerodrome Base’s most liquid tBTC pool with over $8.6M in TVL experienced a near-total de-peg at one point in October 2024. Between February 24 and March 12, 2025, this pool saw sustained periods of significant de-pegs and heightened volatility. This suggests there is high volatility in the tBTC price in comparison with cbBTC on Base.
2.3 Exchanges
Source: tBTC CEX Markets, CoinMarketCap, June 3, 2025
Kraken is the only centralized exchange listing tBTC, offering three trading pairs. As a result, its trading volume and liquidity remain significantly lower than that of decentralized exchanges, which could pose challenges for large-scale OTC trades or CEX-DEX arbitrage.
2.4 Growth
Source: tBTC Circulating Supply on Base, Dune, June 3, 2025
tBTC circulating supply on Base reached an all-time high of 447 tBTC on December 4, 2024, but since then has been in a constant decline currently at 139 tBTC, with a noticeable supply shift away from the network. This indicates unclear growth outlook for the asset on Base chain.
3. Technological Risk
The tBTC technological risk on Base, including smart contract risk, bug bounty program, and dependency risk, remain unchanged since our tBTC Arbitrum onboarding review and are excluded here for brevity, as the underlying architecture remains identical and no new contracts specific to Base chain have been deployed.
4. Counterparty Risk
4.1 Governance and Regulatory Risk
The regulatory risk has been previously discussed in detail as part of the tBTC Arbitrum onboarding review. As there have been no material changes, that assessment remains applicable here.
4.2 Access Control Risk
4.2.1 Contract Modification Options
Here are the controlling wallets:
- Multisig A: 6/9 Safe multisig, owner of all contracts listed in the architecture.
The tBTC architecture on Base is powered by the following contracts:
- tBTC: ERC20 contract for the tBTC token. It is deployed behind an ERC1967Proxy that is controlled by the Multisig A.
- BaseWormholeGateway: Wraps and unwraps Wormhole tBTC into the canonical tBTC and ensures that only authorized cross-chain transfers modify token supply. It is deployed behind an ERC1967Proxy that is controlled by the Multisig A.
- L2BitcoinDepositor: It interacts with BaseWormholeGateway to facilitate the initialization of cross-chain deposits. It is deployed behind an ERC1967Proxy that is controlled by the Multisig A.
The tBTC ERC20 contract uses a role-based access control mechanism. The owner Multisig A can manage addresses authorized to mint tBTC, control Guardian roles, halt the transfers and minting, and withdraw mistakenly sent tokens. The roles are as follows:
| Role | Role Granted To |
|---|---|
Minter |
BaseWormholeGateway |
Guardian |
Eastban, JohnPackel, sap, Luna5 |
Note: The four guardians listed above are Threshold Committee members.
4.2.2 Timelock Duration and Function
Threshold Network has not configured any timelock on tBTC Base contract upgrades. A timelock functionality for critical contract upgrades should be preferred to adhere with the standard risk practices.
4.2.3 Multisig Threshold / Signer identity
All tBTC contracts on Base are owned by Threshold Council’s 6/9 Safe multisig, composed of the following elected members.
| Candidate | Signer Address |
|---|---|
| Eastban | 0x2844a0d6442034D3027A05635F4224d966C54fD7 |
| MrsNuBooty | 0x739730cCb2a34cc83D3e30645002C52bA4B06167 |
| ZeroInFo56 | 0xe989805835093e37E6b12dCddF718e0481024573 |
| JohnPackel | 0x12107242e2FbEd0a503e102751fa6Aa8cB7446eC |
| nico186 | 0x35B46702C5d1CD36194217Fb92F72B563eFf851A |
| sap | 0xcE3778528fC73D46685069D455bbCcE16A6e22Af |
| Vict0r | 0xeceC507477b969FC05053fB044619b723D458E8e |
| wuji | 0xA6d76e990fE10C4b741ceb87590bE6cb23979a6e |
| Wailoaloa | 0xe05808c1EFe0302b27Fc21F0E4a0f15e21e62e78 |
Aave V3 Specific Parameters
ChaosLabs will follow-up with the aligned tBTC risk parameters shortly.
Price Feed Recommendation
Chainlink’s BTC/USD price feed should be used instead of the tBTC/USD feed to price the asset on Aave V3 Base market, as low liquidity in secondary markets makes the latter susceptible to manipulation. Additionally, we recommend implementing a trigger switch mechanism, combined with a proof-of-reserve feed (currently unavailable), to prevent bad debt, as previously discussed during tBTC’s Ethereum onboarding.
Disclaimer
This review was independently prepared by LlamaRisk, a community-led decentralized organization funded in part by the Aave DAO. LlamaRisk is not directly affiliated with the protocol(s) reviewed in this assessment and did not receive any compensation from the protocol(s) or their affiliated entities for this work.
The information provided should not be construed as legal, financial, tax, or professional advice.