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The Bitcoin bridge to Ethereum was closed after two days

May 18, 2020

The team behind the The tBTC project, which aims to implement Bitcoin (BTC) on Ethereum (ETH) through decentralized custodian banks, closed the bridge just two days after it started.

The decision was revealed on May 18 by Matt Luongo, founder of Thesis, a company that supports tBTC through the Keep project. tBTC started on May 16 in the Ethereum core network and only took two days before the team offered a temporary shutdown option.

While the team did not specify the reason for closing the log, It is likely that this is due to an intelligent contract error found by Antonio Salazar Cardozo, chief engineer at Thesis. Luongo said that the contract was reviewed several times, but this appears to have been insufficient. “I’m definitely glad I recognized it so quickly,” he concluded.

The Bitcoin bridge to Ethereum was closed after two days
The Bitcoin bridge to Ethereum was closed after two days

Luongo emphasized that tBTC will be “reborn”, probably after the team redistributed fixed smart contracts. Cointelegraph contacted the developers behind the project for more information, but received no immediate response.

What is tBTC?

The tBTC protocol provides a “minimized trust bridge” between Bitcoin and Ethereum to create tokenized BTC without having to rely on a trusted association.

As mentioned in the tBTC documentation, Bitcoin’s limitations make it difficult to create automatic and trusted bridges. Existing solutions like Wrapped BTC (wBTC) are generally kept safe, and users must trust the wBTC association to redeem the tokens for real BTC. Despite the fact that wBTC is increasingly used in decentralized funding, many of the protocols that use it have been compatible with tBTC, especially compound.

tBTC uses a MakerDAO collateral binding system that must be placed by “signatory groups”.. The signatories are responsible for maintaining BTC in the Bitcoin blockchain and facilitating the redemption process.

Every Bitcoin deposit is secured by an ETH guarantee attached by the signatories, which is initially 150%. If they do not perform a bridging transaction, the collateral will be settled and converted to tBTC at the current exchange rate.

The system uses non-consumable tokens to represent claims for certain Bitcoin deposits that typically expire after six months. During this time, the owner of the non-consumable token can redeem the specific deposit that created it. Deposits are also limited to certain denominations, such as 1 BTC, as this is necessary to facilitate the redemption process.

Some users have found that the system is very complex, which may have made it difficult to identify the error before it started.