tBTC shuts down two days after the token launch on Ethereum mainnet

An attempt to create a trustless version of Bitcoin for use on the Ethereum network has failed after just two days.
The Bitcoin-pegged ERC-20 token, tBTC, has been shut down indefinitely.
The team reportedly discovered a bug in the code, but the specifics remain unclear at the moment.

Rajarshi Mitra Independent Analyst

The Bitcoin-pegged ERC-20 token, tBTC, has suspended all the operations just two days after the token was launched on the Ethereum mainnet. Developer Matt Luongo took Twitter to announce the news.

tBTC lasted on mainnet two days. Alas, it was born before it's time. Goodnight, sweet prince. We've pulled the red lever, pausing deposits for the next 10 days, and are helping users drain funds. We'll publish a full post-mortem when confirmed... and we will rise again. -@mhluongo

Luongo noted that deposits are safe for now. However, he urged users to take advantage of the ten-day halting period to withdraw their funds. While the tBTC team is helping the users with the withdrawal process, the developer stated that the team cannot guarantee the safety of funds that are not pulled out during the “new deposit pause” period.

Although the team did not specify the reason for the shutdown, it appears that it happened due to a smart contract bug found by Antonio Salazar Cardozo, Thesis’ head of engineering. Luongo said that the contract was audited several times but it seems not to have been enough.

Luongo added:

Though we fixed the issue in code last night, we don’t want to expose it until all funds are drained.

The tBTC protocol aimed to provide a “trust-minimized” bridge between Bitcoin and Ethereum to tokenize BTC without depending on a trusted federation. The project employed a market infrastructure similar to MakerDAO in which users could deposit BTC in vaults and receive tBTC on the Ethereum blockchain.

BTC deposits made by users were collateralized by ETH to the tune of 150%. The project also included protocols for liquidating these deposits to tBTC in case a user was unable to finalize the bridging transaction.

Author

Rajarshi Mitra

Independent Analyst

Rajarshi entered the blockchain space in 2016. He is a blockchain researcher who has worked for Blockgeeks and has done research work for several ICOs. He gets regularly invited to give talks on the blockchain technology and cryptocurrencies.

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