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Tokenized Bitcoin on Ethereum— tBTC Shuts Down After 2 Days on Mainnet

tBTC, a tokenized Bitcoin project launched on the Ethereum network, has been shut down after only two days. The announcement about tBTC being put to sleep was made by Matt Luongo, the CEO and founder of Thesis.

Earlier today, Luongo took to Twitter to say that the company decided to “pull the red lever” on the project. Luongo said that the project only lasted two days on the Ethereum mainnet, lamenting that its short life was a result of tBTC being “born before its time.”

According to Luongo, tBTC deposits have been paused and will not be available for the next 10 days while Thesis works on helping users drain their funds. Once all of the funds have been withdrawn and tBTC is officially shut down, a full post-mortem will be published.

However, Luongo’s tweet indicated that this wasn’t the ultimate demise of the ambitious project. He said that the project “will rise again,” most likely indicating that it encountered a problem that was too complex to solve without hurting its users.

While neither Luongo nor Thesis revealed the reason why tBTC had to be shut down, the CEO commended Antonio Salazar Cardozo, the head of engineering at Thesis, and James Prestwitch, the founder of interoperability protocol Summa, for “catching” and confirming the issue so early on in the project’s life. 

Luongo’s announcement sparked a lot of speculation as to what could have happened to tBTC. Some attributed this to the complexity of starting and running DeFi systems, highlighting the fact that smart contracts are notoriously prone to problems.

Nonetheless, most commended Luongo and Thesis for their quick reaction. Shutting down tBTC and allowing users to withdraw their funds was seen as a “good call” that prevented any major loss from occurring. 

Luongo himself said that this wasn’t the end of a project that would bridge Bitcoin and Ethereum—this was more of a “see you soon,” than a “goodbye,” he said in a Twitter response.

More details about the shutdown will be revealed tomorrow, Luongo said.

tBTC began its public launch on Apr. 28, taking two weeks to roll out its technical infrastructure with the support of over 40 crypto and DeFi projects, including DeFi giants such as Uniswap, MakerDAO, and Compound. 

The launch of tBTC was met mostly with excitement—the project’s aim to bridge the gap between Bitcoin and Ethereum was seen as both ambitious and necessary. tBTC was envisioned as an ERC-20 token fully collateralized by Bitcoin, which means that its supply is pegged 1:1 to Bitcoin’s supply. 

Just a day before the public launch, Keep Network, an Ethereum-based system for privately storing data off-chain, and Summa, which provides tools for cross-chain communication, launched KEEP, the network’s native token. The tokens would be used as “signers” that create and control the smart contracts that take in BTC deposits and mint tBTC. 

Back in April, the idea was that signers would consist of project partners, employees, affiliates, and private purchases such as a16z and Polychain. Luongo said that around 80 to 100 stakers would be ready to sign at tBTC’s launch. The same month, Thesis announced that it had raised $7.7 million in a round led by Paradigm Capital and various other venture funds to work on tBTC.

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