Threshold: The Bridge Between Bitcoin and Ethereum
By Tyshe Jiang | Crescent City Capital Market Analyst Intern
What is Threshold
The Threshold network is the first network that builds the bridge between the two decentralized protocols: NyCypher(NU) and Keep Network(Keep). By doing so, it can provide a more secure and private network. Meanwhile, Threshold combines the structural elements from both of the networks to allow users to guarantee user sovereignty over their digital assets on the public blockchain. The assets could be crypto or even user data and company information contained in the smart contracts and DApps or even NFTs. It is launched in January 2022 and approved by both Keep and NuCypher communities.
To be more specific, Threshold takes off-chain containers to encrypt, store, and transmit private data. These off-chain containers termed “keeps,” are available to develop smart contracts while maintaining user privacy and network openness. Through using NyCypher, Threshold can manage information. It can process and encrypt data without revealing it or limiting the permissions of visitors to protect the network.
Apart from that, Threshold also brings more liquidity to the Ethereum ecosystem through the tBTC bridge, which connects Bitcoin to Ethereum. So there is no intermediary in this process, meaning the whole system would be more secure and have high privacy.
Threshold Network Token
T is the native token of the Threshold Network. It serves as both a utility token for the network and as a governance token for Threshold DAO. T token holders can earn in the network in four ways: Staking, providing liquidity, BTC/tBTC, and Threshold Dao.
Staking is obvious, it is to encourage the holder to stake T tokens in order to get rewards. Token holders can become validating nodes by staking. The payment for validating nodes is determined by the quantity of tokens invested. Running a node helps to protect the network and provide cryptographic services to it. The total value of staked tokens on Threshold Network is currently $92 million.
Meanwhile, Token holders could also receive a return by placing their assets into liquidity pools. Bitcoin holders may securely bridge their assets to Ethereum in order to engage in earning in DeFi projects and the future web3 domain through tBTC. Moreover, Threshold DAO token holders can vote on Threshold DAO governance. They may also vote on future network projects.
Threshold DAOs are also very essential for decentralization. As mentioned above, it can provide a community and a platform to vote for community-driven projects, but it also helps run the entire network. This is achieved through Threshold DAO’s three-tiered governance system. The three-tiered system is used in a way that allows each person to be accountable to the other two, like a central government system.
The StakerDAO is made up of holders who stake their T tokens on the network. They are responsible for delegating votes, executing proposals, and submitting proposals on-chain. Every member must have a stake in the network, and their voting power relys on the size of their stake.
The TokenHolder DAO consists of T holders who deposit into the tBTC. tBTC is a scalable bridge between Bitcoin and Ethereum that allows consumers to excahnge BTC for tBTC, an ERC-20 token that can be used throughout the Ethereum DeFi ecosystem. Each tBTC token is completely supported and matched by at least one BTC in reserve. Token holders also have voting rights and so on like the Staker DAO. Token Holder DAO also manages the Treasury and makes T mining decisions, and has the right to veto Staker DAO proposals.
The Elected Council DAO has nine seats in total. Four of these seats are reserved for Keep Network members, four for NuCypher members, and one for an elected independent member. This elected council of members decides on staker awards to encourage token holders to become network stakeholders. It can also veto detrimental suggestions to protect accountability and ensure the network’s decentralization.
The Threshold price on Feb 9th is $0.040713 USD with a 24-hour trading volume of $41,728,801 USD. It has a circulating supply of 8,494,630,242 T coins and a maximum supply of 10,000,000,000 T coins. On Jan 23rd, Coinbase Assets announced its roadmap to add Threshold, which leads to a 94% surge in the T coin value from $0.0245 to a high of $0.046. After passing through Coinbase’s review process, Threshold would be listed on the exchange. On Jan 31st, Threshold’s tBTC launches minting for only Decentralized, Permissionless, Scalable BTC Bridge to DeFi.
In today’s society, as the demand for privacy and data security continues to increase, Threshold’s advantages will become greater, and it will attract more investors’ attention.