The Keep network has released details on the second iteration of its reduced-trust Bitcoin token protocol, tBTC.
In a blog post from 11. In April, Keep Network developer Evandro Saturnino talked about several changes the protocol is considering to address past security issues.
For the second iteration of tBTC, it is expected that stackers will have to lock in only KEEP, and not KEEP and ETH, as well as changes to the portfolio generation mechanism. This protocol allows users tokenize their bitcoins for use on the Ethereum network.
While Mr. Saturnino notes that these changes have the potential to significantly reduce the lien to asset ratio, he cautions that there are new risks associated with the proposed upgrade.
To compensate for the low risk to the pin due to the changes, Saturni uses advances insurance coverage pools to protect against malicious validators and describes the pools as ideally suited to guard against fraud in tBTC v2.
The tBTC works with ETH securities in a network of validators and parts of the blockchain that individually contribute to storing and securing the assets, while controlling the activity on the blockchain. explained Saturnino:
As part of this mission, TBTK was the first solution to power the Ethereum network in a secure and truly decentralized way with a Keep network infrastructure that can even store and compute hidden data on its own.
Once the user has made a request to mine and deposit TBTC, a randomly selected signature group generates a public BTC wallet address for the user. The members of the signatory group are chosen from among the authorized signatories who have agreed to pledge ETH as collateral.
The EPF obligation is an incentive to align signatories’ interests and can also be used to punish members for misconduct. Participants must pledge 150% of their total ETH deposit as collateral in a mechanism similar to MakerDAO and the Dai stablecoin system.
The developer admitted that the team has learned a lot since the launch of the second TBTC backbone in September 2020. Just days after its initial launch in May 2020, the Keep protocol was briefly shut down after a bug was discovered in the ransomware’s codes. The protocol has also encountered difficulties in scaling up, Saturnino said.
Despite support from venture capital giant a16z and other big names, Keep’s tBTC has failed to gain traction with deFi users, with a backlog of only 1,293 tokens sold, according to CoinGecko.
Existing bitcoin tokenization solutions have seen significant growth and popularity over the past year. DeFi Llama says BTC is currently the second largest of DeFi’s protocols, with $8.7 billion in TVL. Unlicensed rival RenBTC has also raised $926 million and is currently ranked 27th best DeFi projects.
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