Keep Network Releases Details For Second Iteration Of Its tBTC
Keep Network Releases Details For Second Iteration Of Its tBTC
April 13, 2021
Keep Network Releases Details For Second Iteration Of Its tBTC
Keep Network Releases Details For Second Iteration Of Its tBTC
April 13, 2021

The Keep Network has released details for the second iteration of tBTC, its “trust-minimized” Bitcoin tokenization protocol.

It has been reported that Evandro Saturnino, the developer of Keep Network, outlined several changes the protocol is considering to address its past issues with collateralization.

However, the second iteration of tBTC is expected to require stakers to only lock up Keep rather than both Keep and Ether (ETH), alongside introducing changes to its wallet-generation mechanism. The protocol allows users to tokenize their Bitcoin (BTC) for use on the Ethereum network.

Saturnino notes the changes “will provide a way of greatly decrease[ing] the collateral ratio of the staking assets,” as he warns of new risks associated with the proposed upgrades. To offset a “small risk to the peg” resulting from the changes, Saturnino advances using insurance coverage pools to protect against malicious validators, describing the pools as “perfectly suited to ensure against fraud in tBTC v2.”

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The report said that tBTC works with ETH collateral on a network of blockchain validators and parties that individually contribute to the minting and backing of the asset, with activity kept in check on the blockchain.

Saturnino explained:

“In this mission that tBTC emerged to be the first solution to bring tBTC in the Ethereum Network in a trustless and truly decentralized way using Keep Network infrastructure which is able to store and compute data hidden even from itself.”

Once the user submits a request to mint tBTC and a deposit bond, a randomly selected signing group generates a public BTC wallet address to the user. Signing group members are picked from an eligible pool of signers who agreed to bond ETH as collateral. The bonded ETH is an incentive to align the interests of the signers and can also be used to penalize members in the case of misbehavior. Signers must bond 150% of the total deposit size in ETH as collateral in a mechanism that is similar to the MakerDAO and Dai stablecoin system.

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Likewise, the developer acknowledged the team has learned a lot since the second launch of the tBTC mainnet in September 2020. Within just a few days of its initial launch in May 2020, Keep protocol was briefly shut down after a bug was detected in its redemption codes.

Thus, Saturnino added that the protocol also struggled to scale.

Source: Cointelegraph


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Ishita Bora

Ishita Bora is a Senior Content Creator at Digital Notice Media Labs with experience of 1.5 years. She has completed her Master's Degree in Language and Linguistics in 2019 from Gauhati University, India. Her interest lies in blockchain technology and cryptocurrency space. She loves writing about blockchain and other blockchain-related articles.