What is Threshold Network (T)?

tBTC: The Best Representation of Bitcoin in the DeFi World

(Source: TheTNetwork)

The most important product of Threshold Network is tBTC, a decentralized token that is 1:1 pegged to Bitcoin and fully backed by BTC. Unlike common solutions in the market such as WBTC (which requires centralized custody) or renBTC (which is no longer active), tBTC employs a trustless mechanism, ensuring the secure custody and redemption of Bitcoin through the operations of Threshold's nodes and multi-signature.

Users can lock BTC into the Threshold bridging protocol to receive an equivalent amount of tBTC, allowing them to participate in DeFi activities such as lending, stablecoin minting, and liquidity mining on Ethereum or other supported networks, and can redeem it 1:1 for native BTC at any time, maintaining maximum liquidity and sovereign control.

Threshold USD (thUSD): A stablecoin backed by both Bitcoin and Ethereum.

In addition to tBTC, the Threshold Network has also launched thUSD, a stablecoin backed by ETH and tBTC, aimed at being pegged to the US dollar. This stablecoin is built on the Liquity protocol, modified to achieve a more sustainable operating mechanism. Its main features are as follows:

• Over-collateralization: The minimum collateralization ratio is 110%, ensuring stability.
• Non-rental incentives: Unlike Liquity, the stable pool of thUSD is provided by the protocol's own capital (PCV), eliminating the need to pay tokens as incentives to passive stakers, significantly improving resource utilization efficiency.
• Supports multiple collateral types: in addition to ETH, it also supports tBTC. Future expansion to other decentralized assets may be possible.
• No additional governance tokens: Unlike LQTY, thUSD does not require the issuance of additional governance tokens; all profits enter the PCV self-circulation.

This design makes thUSD a self-sustaining and risk-resistant stablecoin solution.

How does Threshold Network achieve true decentralized bridging?

The tBTC v2 bridging solution of Threshold has core advantages in decentralization and permissionless access:

• No need to trust intermediaries: There is no need to entrust BTC to centralized institutions, but rather to complete bridging and redemption through multi-signature nodes and smart contracts.
• Strong anti-censorship capability: Each bridging node is decentralized and deployed, with no single point of control, making it less susceptible to external interference.
• Scalable architecture: Designed to support large-scale BTC inflows into the DeFi market, addressing past bridging bottlenecks.

Threshold is not only an innovation in technology but also a continuation of the values of Bitcoin: disintermediation, sovereignty, and free participation.

The tokenomics of Threshold Network

T is the native token of the Threshold Network, serving as the value carrier and governance hub of the entire network, with a total supply of 11,155,000,000 tokens, distributed as follows:

1. NU Holders Airdrop: 4.5B T
   As an important part of the merger between NuCypher and Keep, original NU token holders will receive an equivalent allocation of T.

2. KEEP holder airdrop: 4.5B T
   Like NU, the original supporters of Keep Network also received an allocation of T.

3. Threshold DAO Treasury: 1B T
   Used for community governance, cooperative subsidies, future incentive plans, etc.

4. Network startup incentive (additional issuance): 1.155B T
   In the early launch phase, issued in a way that inflates, rewarding participants in staking and node operators to ensure network security.

This design not only ensures fair distribution but also injects early resources and governance potential into the entire ecosystem.

Main Purpose

• The value feedback asset of the tBTC system operation: The bridging fees generated by users cross-chain using tBTC will be returned to token holders in the form of buying back T, achieving value accumulation.
• Governance Tokens: T holders can participate in important proposals such as protocol upgrades, parameter adjustments, and asset listings through Threshold DAO, achieving community governance.
• Cross-chain liquidity: The T token is based on the ERC-20 standard and is designed to support cross-chain bridging, expanding its coverage and liquidity in DeFi application scenarios.

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Summary

Threshold Network is not creating a new Bitcoin token, but rather building a trusted bridge that allows Bitcoin to truly integrate into the DeFi world. Through the permissionless cross-chain capabilities of tBTC, the innovative stable mechanism of thUSD, and the multiple value capture of T tokens, Threshold offers a well-structured and risk-controlled BTC+DeFi solution for the crypto world.