What is Threshold (T)?

Deep Dive

1. Purpose & Value Proposition

Threshold solves the challenge of securely using Bitcoin in decentralized applications (dApps) while preserving self-custody. Its flagship product, tBTC, allows users to mint Bitcoin-backed tokens (1:1 pegged) for use on Ethereum, Sui, and other chains. This bridges Bitcoin’s liquidity to DeFi for lending, trading, and yield strategies while maintaining decentralization (Threshold Network).

2. Technology & Architecture

Threshold uses threshold cryptography, a system where sensitive operations (like signing transactions) are distributed across a network of nodes. For example, tBTC requires 51 out of 100 node operators to approve transactions, ensuring security without centralized control. This architecture underpins all Threshold services, including decentralized custody and encrypted data management (Threshold Blog).

3. Governance & Tokenomics

The T token governs the network via a DAO, where holders vote on upgrades, treasury allocation, and partnerships. T also secures the network through staking, incentivizing node operators to act honestly. The token supply originated from the merger of NuCypher (NU) and Keep (KEEP), with conversions based on their original supplies (Threshold Documentation).

Conclusion

Threshold redefines Bitcoin’s utility in DeFi through decentralized infrastructure, merging cryptographic innovation with community governance. As institutional interest in Bitcoin grows, can Threshold’s tBTC become the standard for cross-chain liquidity without compromising decentralization?