Threshold Network’s tBTC bridge upgrade opens the door for over $400 billion in institutional Bitcoin to flow into DeFi.
Threshold Network, a cross-chain bridging infrastructure hub that allows Bitcoin to move between different blockchains, has upgraded its tBTC bridge to make it easier for large investors to use BTC in decentralized finance (DeFi).
The update means that institutions such as ETFs, hedge funds and custodians will soon be able to deploy their Bitcoin in DeFi to earn yield or provide liquidity without removing it from regulated storage, according to a press release shared with The Defiant.
Most institutional Bitcoin has been locked in vaults due to strict compliance and insurance rules, Threshold Network claims.
The upgrade is expected to give tBTC a new architecture that would tie directly to regulated custodians, allowing institutions to create tokenized Bitcoin without physically removing it from insured storage.
$400 billion in blocked liquidity
Speaking to The Defiant, MacLane Wilkison, co-founder and CEO of Threshold Labs, the company behind Threshold Network, noted that since the approval of spot ETFs in the United States, institutional participation in Bitcoin “has accelerated at an unprecedented rate.”
Speaking to The Defiant, MacLane Wilkison, co-founder and CEO of Threshold Labs, the company behind Threshold Network, noted that since the approval of spot ETFs in the United States, institutional participation in Bitcoin “has accelerated at an unprecedented rate.”
“Institutions now hold over $400 billion in BTC, corporate reserves increased 40% in the third quarter to $117 billion, and ETFs account for nearly 7% of the asset’s market cap. Bitcoin is becoming an essential part of balance sheets and professional portfolios,” Wilkison said.
With the upgrade, institutions can now create tBTC in a single transaction without paying gas fees, and instantly redeem it back into Bitcoin. The bridge supports multiple blockchains including Ethereum, Arbitrum, Base, Polygon, Sui, Starknet, BOB, and Optimism.
Data from DefiLlama shows that Bitcoin has accumulated over $7.7 billion in its DeFi ecosystem. While this figure may seem large, it still only represents 6.7% of the market, behind BNB Chain, Solana and Ethereum, which have over $7.8 billion, $10.4 billion and $77.2 billion locked in DeFi, respectively.
Threshold Network, which has processed over $4.2 billion in Bitcoin bridge volume, has a total value locked of over $640 million, according to DefiLlama. This makes it the third largest DeFi project in the Bitcoin DeFi space, behind Lombard, with over $1.2 billion in TVL, and Babylon Protocol, with over $5.9 billion.
Disclaimer: This article has been updated to clarify that the Threshold upgrade is not yet fully available.
