Wormhole has received tBTC integration, and Austin Federa, head of strategy at Solana Foundation, reacted with excitement concerning the new development. "Solana is about to be the best place to trade Bitcoin," he tweeted.
Wormhole, a communication bridge between Solana and other top decentralized finance (DeFi) networks, has welcomed the arrival of tBTC to the platform.
BTC is a scalable Bitcoin equivalent that enables users to access the Ethereum and cross-chain DeFi ecosystems. Threshold DAO is the network behind tBTC.
The Wormhole integration will allow tBTC to be moved to both Ethereum Virtual Machine (EVM) chains such as Arbitrum, Optimism and Polygon and non-EVM chains such as Solana, Aptos, Sui and Cosmo.
The integration with Wormhole relies on a novel technique for bridging ERC-20 tokens that enables capital deployment to Ethereum L2s without liquidity fragmentation. Instead of creating wrapped tokens for each chain, tBTC will be minted on Ethereum, and a canonical token native to each new ecosystem will be deployed.
Intending to establish tBTC as the predominant form of BTC in on-chain DeFi, Wormhole proposed an incentive program to the Threshold community in mid-April 2023. On April 29, 2023, the proposal received broad community support and was approved in its entirety.
The program will involve Threshold integrating with the Wormhole Token Bridge and rewarding liquidity providers with token options to mint tBTC to be sent across as many as 20 new ecosystems of Wormhole-connected chains.
Users can create tBTC by locking their Bitcoin in a deposit on the Bitcoin blockchain (without using a custodian), which results in the creation of a corresponding tBTC token on the Ethereum network.