TL;DR
- Threshold Network upgraded its tBTC bridge to let institutions use their Bitcoin in DeFi without removing it from custody, integrating insured custodians.
- The update aims to unlock over $400 billion in institutional liquidity and enable gas-free tBTC minting in a single transaction.
- The bridge, compatible with eight networks, seeks to make tBTC the institutional Bitcoin standard in DeFi and expand its footprint across the multichain market.
Threshold Network launched an upgrade to its tBTC bridge that allows financial institutions to use their Bitcoin in DeFi applications without withdrawing it from custody. The new system integrates directly with insured custodians, making it possible to issue tBTC—the tokenized version of BTC—without moving assets out of secure vaults.
Threshold Aims to Unlock Institutional Capital
The goal is to unlock institutional liquidity estimated at more than $400 billion. According to Threshold Labs, the protocol’s developer, institutional interest in Bitcoin surged after the approval of spot ETFs in the United States. Today, these funds represent nearly 7% of the network’s total value, while corporate reserves rose 40% in the third quarter to $117 billion.
With this new architecture, custodians, funds, and ETF issuers can mint tBTC in a single transaction without paying gas fees and instantly redeem it for Bitcoin. The bridge supports Ethereum, Arbitrum, Base, Polygon, Sui, Starknet, BOB, and Optimism, expanding its reach within the multichain ecosystem.
Threshold Network aims to establish tBTC as the institutional standard for Bitcoin in DeFi by offering interoperability with insured custody and regulatory compliance. Until now, most institutional BTC has remained idle due to regulations that restrict moving funds outside custodial environments.
Bitcoin Lags Far Behind in the DeFi Ecosystem
Data from DefiLlama shows that Bitcoin holds $7.7 billion locked in DeFi, just 6.7% of the market total—still far behind Ethereum with $77.2 billion, Solana with $10.4 billion, and BNB Chain with $7.8 billion. Threshold’s goal is to increase that share by directly linking institutional capital with decentralized protocols.
Threshold Network currently holds $640 million in total value locked, ranking as the third-largest project in the Bitcoin DeFi ecosystem, behind Babylon Protocol and Lombard.
