Thesis announced a project called tBTC seeks to forge a truce between Bitcoin and Ethereum, a rivalry existed for almost as long as there were digital currencies, by allowing owners of Bitcoin access to the financial applications running on Ethereum.
Thesis has closed a $7.7 million deal by selling its Keep tokens to some of the top investors of crypto with an upcoming product that may attract more decentralized finance (DeFi) players to incorporate bitcoin-backed tokens.
The company announced Thursday will soon be debuting TBTC, a trustless platform for making tBTC tokens on Ethereum that are backed by bitcoin. The BTC’s private keys are stored using Keep, the company’s system to store secrets on the world computer in a usable fashion. Few secrets are more useful and valuable than private keys made by bitcoin.
That said, DeFi has been very publicly skeptical of a vocal cohort of Bitcoin partisans, but the creator of TBTC doesn’t think that represents the broader view. After all, the bitcoin holds more people than ever before.
“The silent majority of most bitcoin and ETH people aren’t maximalists,” said Matt Luongo, CEO and founder of Thesis, a blockchain development studio. The idea for Keep arose out of building bitcoin rewards app Fold, which needed ways to store data in public, privately. While not committing to a precise timeline, Luongo said both Keep and TBTC will go live at the same time – in a matter of “weeks not months.”
Paradigm Capital led the new funding round, with participation from Fenbushi Capital, the Collaborative Fund and others. Keep had a previous round in December 2018 which included participation by Andreessen Horowitz, Polychain Capital and Draper Associates.
What’s different about tBTC
“Decentralized financial applications on Ethereum have seen clear demand,” Paradigm co-founder Fred Ehrsam said in a statement. “Bitcoin is the world’s largest cryptocurrency. Building a bridge that allows Bitcoin to interact with DeFi makes a lot of sense, and tBTC is a credible attempt to do exactly that.”
Luongo is an extremely long BTC himself, but he’s not one of those bitcoin diehards who sets DeFi apart.
“I think the whole Bitcoin-Ethereum cultural split has outlived its usefulness,” he said.
Bitcoin is already on Ethereum, with wBTC most notably, an ERC-20 token created by BitGo.
Naturally wBTC is building on the strengths of its creator. BitGo serves as the custodian, and allows anyone to check their BTC balances against exceptional wBTC. But having a centralized, identifiable custodian could potentially introduce risks to censorship in some users ‘eyes.
Conversely, TBTC is an application designed to allow the bitcoin backing tBTC tokens to be stored trustlessly. A user contacts the Keep network to mint one tBTC which designates a wallet to store the bitcoin. The keys for that wallet are held across several nodes on the Keep network that have staked KEEP tokens in a multi-sig structure.