Announcing tBTC with James Prestwich and Matt Luongo of Cross-Chain Group
Guests: James Prestwich and Matt Luongo
It goes without saying that DeFi is better with Bitcoin as collateral. And there is an appetite among BTC holders for ways to actively apply our money. But as of yet, there is no way to bring Bitcoin onto Ethereum that is censorship-resistant and adheres to the #1 principle of BTC: No printing money. Until now. The newly formed Cross-Chain Group is working on a project that facilitates interoperability known as tBTC Network.
Matt Luongo and James Prestwich are the crypto OGs behind tBTC, a decentralized, redeemable, BTC-backed ERC-20 token that gives Bitcoin users access to financial services on other chains. Today, they join us to discuss how their respective expertise in secure multiparty computation and stateless SPV led to their partnership on tBTC and the founding of Cross-Chain Group. Matt and James explain the technical and economic guarantees of tBTC that satisfy Bitcoin users and offer us a high-level overview of the system’s functionality, including how tBTC is minted and redeemed.
Matt and James go on to cover how tBTC signing groups are selected and how the system ensures they are behaving honestly, discussing how the network handles aborts versus fraud and its backup auction mechanism for sourcing liquidity when slashing conditions happen. They also explain their decision to launch with an authority-based price feed mechanism and later transition to a federation-based one. Listen in for insight around what the success of tBTC might mean for Ethereum and learn how Cross-Chain Group is working to further interoperability via collaboration and development in the crypto space.
Today’s Topics
[1:24] James’ previous crypto projects and current work on cross-chain solutions with Summa
[3:32] Matt’s background in crypto and how he came to focus on secure multiparty computation
[4:48] The purpose of MPC and its potential use cases
[7:03] How James’ workaround stateless SPV led to Cross-Chain Group
[9:38] How SPV facilitates financial contracts between chains
[11:08] The Cross-Chain Group origin story
[12:46] How tBTC differs from Wrapped Bitcoin
[15:42] The technical and economic guarantees of tBTC that will satisfy Bitcoin users
[17:04] The attack vectors Matt & James are solving for
[17:58] A high-level overview of the basic functionality of tBTC, including how it’s minted and redeemed
[24:14] How tBTC signing groups are selected + how the system ensures that they’re behaving honestly
[26:43] The small role the Keep token plays in the system and how broadly it’s distributed
[28:15] Proving a deposit has been made properly on the host chain
[29:23] The complex, adjustable security model employed by tBTC
[32:34] Why Matt & James chose a 1 BTC lot size for launch
[37:05] How the tBTC system handles aborts vs. fraud
[39:26] The backup auction mechanism the system uses to source liquidity when slashing conditions happen
[42:37] The potential for using an order book model exchange for liquidations in tBTC
[45:27] How Matt & James are architecting risk-management + how their approach differs from that of Liquid
[46:35] An overview of the simple Dutch auction process utilized by tBTC
[53:10] Matt & James’ decision to start with an authority-based price feed mechanism and later transition to a federation-based one
[54:59] The custodial fees you can earn on tBTC and how they are set
[56:46] How Matt & James think about the operating costs of a system like tBTC
[59:04] Why Matt believes a difficulty-adjustment-based approach to fees is the strongest
[59:36] The anticipated launch date for tBTC
[1:00:17] How the team plans on bootstrapping liquidity for tBTC in the early stages
[1:02:53] The short- and long-term implications for Ethereum should tBTC gain traction
[1:04:26] Matt & James’ vision for Cross-Chain Group
[1:07:52] James’ take on which chains are the easiest and most difficult to work with from an operability standpoint
[1:11:50] The obvious reasons why DeFi is better with Bitcoin
Connect with Matt & James
Connect with Thomas & Louis
Resources
Keep, Summa, Zcash, Storj, Chia, Fold, Cosmos, Polkadot, Eth2, Wrapped Bitcoin. Metamask. Electrum, GreenAddress, Maker, Uniswap, 0x, Liquid, BlockFi, UMA, Compound, Figment, Bison Trails, Staked, Counterparty, Omni, Litecoin, Decred
More About Wyre
For more information about Wyre:
