Venture production studio Thesis had to put to sleep its tBTC project, a decentralized Bitcoin-to-Ethereum bridge, just days after its mainnet launch.
According to a tweet from Matt Luongo, the founder of Thesis, the tBTC project had its “red lever” pulled only two days after it hit the mainnet, with all deposits currently being paused. Though the company is yet to specify the reason behind shutting down the protocol, we can assume it was due to a smart contract bug, as Luongo said in one of his follow up tweets that the team was “definitely glad we caught this early”.
Luongo has further said that the team is currently “helping users drain funds”, and that the pause will last for the next 10 days. In addition to saying that the project “will rise again”, Luongo said that a “full post-mortem” of the event will be published once confirmed. He also specified that the contract had already gone through multiple audits, and that another audit of the contract was scheduled for 19 May.
The project aims to bridge Bitcoin and Ethereum, by allowing BTC owners to access decentralized application on Ethereum, without relying on a trusted federation. tBTC uses a MakerDAO-like system of collateral bonds that must be put up by “signer groups”, which hold the BTC on the Bitcoin blockchain, and facilitate any redemption process.
The “signers” secure each Bitcoin deposit with an ETH collateral, initially amounting to 150%, and should they fail to execute a bridging transaction, that same collateral is then liquidated and converted into tBTC, according to the current exchange rate. As noted in the project’s documentation, it’s difficult to create automatic and trustless bridges because of Bitcoin’s limitations.
Thesis is the company that backs the tBTC project, and stores all private keys guarding the BTC in its Keep, the firm’s system for storing valuables in a usable fashion. In April, as reported by CoinDesk, the company raised around $7.7 million in a funding round led by Paradigm Capital, and with participation from firms including Fenbushi Capital and Collaborative Funds.