tBTC Pulls Plug Two Days After Token Launch on Ethereum Network
The Bitcoin-pegged ERC-20 token, tBTC, has temporarily shuttered operations two days after the token was launched on the Ethereum mainnet.
tBTC Shuts Down After Two Days
In a Twitter thread by Matt Lunogo, on Monday, May 18, 2020, the project head of tBTC, stated that the tBTC project was shut down temporarily while deposits will be halted for 10 days. Although there was no specific reason why the curtains were closing on the tBTC token, Luongo pledged to release a breakdown on the incident.
Luongo went on to state that deposits are safe for now but urged users to take advantage of the 10-days halting period to withdraw their funds. While the tBTC team is helping users with the withdrawal process, the developer stated that the team cannot guarantee the safety of funds not pulled out during the “new deposit pause” period.
According to Luongo’s tweet thread, the issue was first discovered by Thesis’ Engineering head, Antonio Salaza Cardozo, and confirmed by James Prestwich. Furthermore, the tBTC project lead, commenting on the matter said:
“Because the system is young and most minters are active community members, I think we can get this done in 1 to 2 days. Though we fixed the issue in code last night, we don’t want to expose it until all funds are drained.”
tBTC envisioned as a non-custodial bridge token between Bitcoin and Ethereum was designed to allow users tokenize BTC without the need for trusted federated pegs. The project employed a market infrastructure not dissimilar to MakerDAO — the popular decentralized finance (DeFI) lending platform — in which users could deposit BTC in vaults and receive tBTC on the Ethereum blockchain.
Like MakerDAO, BTC deposits made by users are collateralized by ETH to the tune of 150 percent. The project also included protocols for liquidating these deposits to tBTC in the event that the user was unable to finalize the bridging transaction.
Bitcoin and Ethereum Bridging Solutions
Given the difficulties in building solutions directly on the Bitcoin base layer, some developers have sought to create bridge protocols to other blockchains more amenable to developing useful applications. Ethereum, being the second-largest blockchain implementation by market capitalization has been the network of such for such deployments.