tBTC shuts down deposits just days after launching on mainnet

The promise of bringing bitcoin onto Ethereum has taken a step back as tBTC, a token with a 1:1 backing with bitcoin has stopped taking deposits. The contract will pause deposits for 10 days to allow developers time to notify users of what happened and allow them to withdraw funds. A full-post mortem will be provided in the coming days to further explain what happened.

Why it matters

• Efforts to bring bitcoin to Ethereum have ramped up significantly this year, led by WBTC, an ERC20 backed by bitcoin held by BitGo. Recently the token which now has over $22 million of btc locked, was added as a collateral type in Maker allowing loans to be drawn against it. This system is effective in bringing bitcoin into the composable Ethereum ecosystem, however, it compromises on the trust minimized nature of DeFi. This is where tBTC was intended to provide a more decentralized alternative, a feat that is clearly more difficult than it appears.
• User funds appear to be safe so long as they are withdrawn in this 10 day period but this serves as yet another wake-up call that DeFi should used with extreme caution as it is still highly experimental.

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