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Threshold is taking a significant step toward expanding Bitcoin’s role in decentralized finance (DeFi). The crypto infrastructure platform has upgraded its tBTC bridge, introducing features designed to make it easier for institutions and large Bitcoin holders to move their assets into DeFi ecosystems. With more than $500 billion in institutional and whale-controlled BTC sitting idle, Threshold believes its latest improvements could unlock massive liquidity for the broader crypto market.
A Simpler, Faster Way to Mint tBTC Onchain
Threshold’s upgraded tBTC bridge now offers a streamlined experience for minting tokenized Bitcoin on supported blockchains. According to the company, institutions can now mint tBTC with a single Bitcoin transaction, without the need for additional approvals or gas fees. This removes several friction points that previously made participation more complex for traditional players.
The improvements work both ways. Redemptions from tBTC back to the Bitcoin network have also been simplified, allowing institutions to return to native BTC with minimal delays.
Speaking with Cointelegraph at Web Summit in Lisbon, Threshold’s head of marketing, Rizza Carla Ramos, explained that these upgrades will likely appeal to institutions that want their Bitcoin to be more productive rather than sitting idle.
“If they’re investing for Bitcoin in the long run, they don’t just want it sitting there. You want liquidity, you want depth, and you want your assets to actually generate profit,” Ramos said.
She emphasized that unlocking institutional Bitcoin for DeFi is key to building “the next level of finance” onchain.
A trust-minimized design to attract major players
At the core of Threshold’s infrastructure is its decentralized security model. Each tBTC token is backed 1:1 by real Bitcoin, with no centralized custodian holding user funds. Instead, the system relies on a threshold signature mechanism, where at least 51 out of 100 independent Bitcoin node operators must sign transactions for them to be valid.
This differs significantly from older solutions like Wrapped Bitcoin (WBTC) or renBTC, which rely on centralized custodians or semi-centralized setups. Threshold argues that the trust-minimized approach is better suited for institutions that want transparency, verifiable security, and resilience from single points of failure.
Expanding Bitcoin Liquidity Across Multiple Chains
The upgraded bridge allows tBTC to move seamlessly across several major blockchain networks. Supported chains include:
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Ethereum
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Arbitrum
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Base
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Polygon
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Sui
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Multiple additional ecosystems
By enabling Bitcoin to take part in DeFi activities — such as lending, liquidity provisioning, derivatives, and yield strategies — Threshold aims to deepen liquidity while preserving Bitcoin’s role as the digital asset with the largest market value.
Threshold highlights that if even a small percentage of institutional Bitcoin enters DeFi, the impact could be substantial. More liquidity could stabilize decentralized exchanges, strengthen lending markets, and expand opportunities for yield generation.
Growing Competition in the Bitcoin Tokenization Market
Threshold has processed more than $4.2 billion in cumulative volume through its tBTC bridge since its launch five years ago. While this is a strong milestone, it still trails behind the volume of competitors like WBTC, which remains the most widely used tokenized Bitcoin solution.
However, WBTC operates with centralized custodians — something institutions may want to avoid when moving large sums across multiple networks. Threshold believes decentralization will become a stronger selling point as regulatory frameworks mature and institutions seek safer, audit-friendly onchain tools.
WBTC is also expanding its own network footprint. On Thursday, WBTC launched support on Hedera, aiming to bring more Bitcoin liquidity to the high-speed public ledger.
Why Bringing Bitcoin Into DeFi Matters
Threshold argues that the introduction of tBTC into DeFi ecosystems will strengthen the foundation of the market. With Bitcoin representing the largest store of value in the crypto sector, enabling it to move freely across networks can:
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Deepen liquidity in decentralized exchange pools
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Strengthen collateral options for lending and borrowing
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Improve the sustainability of yield-generating protocols
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Reduce dependence on more volatile assets
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Increase institutional confidence in DeFi mechanisms
Ramos added that institutions increasingly expect ways to generate yield from their long-term Bitcoin holdings rather than holding it passively.
A Potential Turning Point for Institutional DeFi Participation
The tBTC upgrade marks an important step for Bitcoin’s integration into DeFi. By reducing friction, eliminating gas fees for minting, and offering a highly secure decentralized model, Threshold is positioning itself as a key player in bridging Bitcoin to the multi-chain ecosystem.
If even a fraction of the $500 billion in institutional Bitcoin shifts into DeFi rails, it could significantly reshape the market’s liquidity structure and unlock new opportunities for both institutional investors and the broader crypto community.
