What is Threshold (T)?

Deep Dive

1. Purpose & Value Proposition

Threshold solves the problem of Bitcoin’s isolation from DeFi by enabling decentralized, 1:1 Bitcoin-backed tokens (tBTC) usable across chains like Ethereum, Sui, and Starknet. Unlike centralized bridges, tBTC eliminates single points of failure, letting users retain self-custody while accessing DeFi yield strategies, lending, and trading. This addresses Bitcoin’s utility gap without compromising its security or decentralization.

2. Technology & Architecture

Threshold uses distributed key generation (DKG) to split cryptographic operations across 100 independent nodes. A 51-of-100 threshold signature requirement ensures no single entity controls funds. For example:
- tBTC Bridge: Users deposit BTC to mint tBTC tokens; node operators collectively manage keys, requiring 51+ signatures for redemptions.
- Cross-Chain Integration: Supports Ethereum, Layer 2s (Arbitrum, Base), and non-EVM chains (Sui) via gasless minting and streamlined redemptions.

3. Tokenomics & Governance

The T token serves dual roles:
- Staking: Node operators stake T to run infrastructure and earn fees, securing the network.
- Governance: T holders vote via the Threshold DAO on proposals, such as protocol upgrades (e.g., gasless minting) or partnerships (e.g., Sui integration). The DAO emerged from the 2021 merger of Keep Network and NuCypher, unifying their communities under one token.

Conclusion

Threshold is a decentralized infrastructure layer enabling Bitcoin to flow securely into DeFi through threshold cryptography and community governance. How might its approach reshape institutional adoption of Bitcoin in decentralized finance?