CoinClear

Keep Network

5.6/10

Privacy infrastructure and tBTC bridge operator — merged with NuCypher into Threshold Network, providing one of the more trust-minimized BTC bridges to Ethereum.

Updated: February 16, 2026AI Model: claude-4-opusVersion 1

Overview

Keep Network launched in 2020 with a dual mission: provide privacy infrastructure for public blockchains through "keeps" (off-chain containers for private data) and build tBTC — a trust-minimized bridge bringing Bitcoin to Ethereum. The privacy infrastructure vision was broad, but tBTC became the project's most notable product.

In 2022, Keep Network and NuCypher (a proxy re-encryption protocol) merged their staking systems to form the Threshold Network. The KEEP and NU tokens were migrated to T (the Threshold token), creating a unified staking and governance system. Threshold Network now operates three products:

  1. tBTC v2: A trust-minimized Bitcoin bridge using threshold ECDSA signatures.
  2. TACo (Threshold Access Control): Decentralized access control using proxy re-encryption (from NuCypher).
  3. Threshold staking: Unified staking system securing both products.

tBTC v2 is the most significant product. It allows users to mint tBTC (an ERC-20 token) by depositing BTC, with the BTC custody managed by a decentralized network of operators using threshold signatures. Unlike WBTC (which depends on a centralized custodian, BitGo), tBTC aims for trust-minimized custody where no single operator can steal the deposited BTC.

Technology

tBTC v2

tBTC v2 uses threshold ECDSA (t-of-n signatures) for Bitcoin custody. A randomly selected group of operators collectively controls the BTC deposit. No single operator — or any subset below the threshold — can unilaterally move the Bitcoin. The threshold signature scheme provides:

  • Distributed custody: No single point of failure for BTC deposits.
  • Permissionless minting: Users can mint tBTC by depositing BTC without trusting a centralized custodian.
  • On-chain verification: The Ethereum smart contracts verify that BTC deposits are valid before minting tBTC.

Threshold Signatures

The cryptographic core is threshold ECDSA signatures on the secp256k1 curve (Bitcoin's curve). The distributed key generation (DKG) protocol creates shared keys among operator groups, and threshold signing allows the group to produce valid Bitcoin signatures for redemption without any single operator knowing the full private key.

TACo (Threshold Access Control)

TACo provides decentralized access control using proxy re-encryption. Data producers can encrypt data with access conditions (NFT ownership, DAO membership, etc.), and Threshold operators re-encrypt the data for authorized consumers without ever seeing the plaintext. This enables conditional decryption without trusted intermediaries.

Operator Architecture

Threshold operators run client software, stake T tokens, and participate in both tBTC custody and TACo operations. The unified staking model means a single set of operators secures multiple services, improving economic efficiency.

Security

tBTC Security Model

tBTC v2's security depends on the honest majority assumption among the threshold group. As long as more than t operators (out of n) are honest, the Bitcoin is safe. The economic security comes from T token staking — operators risk losing their staked T if they misbehave. The total value staked must exceed the value of BTC in custody for economic security to hold.

Comparison to WBTC

tBTC is significantly more trust-minimized than WBTC. WBTC depends entirely on BitGo's custody, creating a single point of failure. tBTC distributes trust across multiple independent operators. However, WBTC has the advantage of simplicity and a longer track record.

Historical Issues

tBTC v1 launched in 2020 but was paused shortly after due to a vulnerability in the deposit contract. The v1 issue was caught early (limited funds at risk) and led to significant security improvements in v2. The v1 incident, while concerning, demonstrated responsible security practices.

Audit Coverage

tBTC v2 and Threshold contracts have been extensively audited by firms including Trail of Bits, Least Authority, and others. The cryptographic primitives (threshold ECDSA) are well-studied and the implementation has undergone significant peer review.

Decentralization

Operator Network

The Threshold operator network consists of dozens to hundreds of active stakers participating in tBTC and TACo operations. Operators are independent entities with geographic and organizational diversity. The operator set is not as large as major PoS chains but is meaningfully decentralized for a specialized infrastructure service.

Threshold DAO

Threshold Network is governed by a DAO structure with token holder voting. Governance participation is moderate, with proposals covering protocol parameters, treasury management, and product direction. The DAO represents genuine decentralized governance, though whale influence is present.

Staking Distribution

T staking distribution is relatively broad, though large stakers from the KEEP and NU token migrations hold significant positions. The Threshold DAO treasury holds substantial T tokens for ecosystem development.

Adoption

tBTC Adoption

tBTC has grown its supply significantly since v2 launch, establishing itself as a viable alternative to WBTC. The tBTC supply has reached hundreds of millions of dollars in value, making it one of the larger trust-minimized BTC representations on Ethereum. Integration with DeFi protocols (Curve, Aave, Maker) has driven adoption.

DeFi Integration

tBTC's integration into major DeFi protocols is its strongest adoption metric. Acceptance as collateral on Maker, liquidity on Curve, and borrowing/lending on Aave provide genuine utility. The push for tBTC to replace WBTC as the standard BTC representation on Ethereum gained momentum after WBTC's custody controversy with Justin Sun's involvement in BitGo.

TACo Adoption

TACo adoption is earlier-stage. The conditional decryption and access control use cases are relevant for NFT content, DAO tooling, and encrypted data sharing, but actual deployment numbers are modest.

Competition

tBTC competes with WBTC (dominant market position), cbBTC (Coinbase custody), and various other BTC bridge solutions. The trust-minimization story is compelling to crypto purists but most users prioritize liquidity and convenience over decentralization.

Tokenomics

T Token

T (Threshold token) was created from the merger of KEEP and NU. The total supply is approximately 10 billion T. The token is used for staking (securing tBTC and TACo), governance, and earning protocol fees.

Staking Economics

Operators stake T to participate in tBTC custody and TACo operations. Staking rewards come from a combination of inflation and protocol fees. As tBTC adoption grows, fee revenue from minting/redemption provides sustainable income for stakers.

Revenue Model

tBTC charges fees for minting and redemption operations, with fees distributed to stakers and the DAO treasury. As tBTC supply grows, the recurring fee revenue provides a more sustainable economic model than purely inflationary rewards.

Merger Economics

The KEEP-NU merger into T was a significant tokenomics event. Conversion ratios were set at approximately 4.78 T per KEEP and 3.26 T per NU. The merger consolidated two smaller tokens into one with combined utility and market cap.

Risk Factors

  • tBTC bridge risk: Any bridge carries risk; a threshold signature compromise could result in BTC loss.
  • tBTC v1 history: The v1 pause, while handled responsibly, is a historical security mark.
  • WBTC dominance: WBTC's massive market share and liquidity create a strong incumbency advantage.
  • Complexity: Threshold ECDSA and the merged protocol architecture are complex, increasing implementation risk.
  • Token merger overhang: The KEEP-NU merger created complex migration dynamics and potential selling pressure.
  • Economic security: Total value of T staked must exceed tBTC custody value for security guarantees.
  • Competition: cbBTC, various bridge protocols, and native BTC DeFi (Lightning, Stacks) compete for BTC-on-Ethereum demand.

Conclusion

Keep Network / Threshold Network has built one of the more technically principled Bitcoin bridges to Ethereum. tBTC v2's threshold signature scheme provides genuine trust-minimization that WBTC cannot match. The merger with NuCypher into Threshold Network added privacy infrastructure capabilities (TACo) and consolidated resources. The growing tBTC supply and DeFi integrations demonstrate real adoption.

The challenge is overcoming WBTC's massive first-mover advantage in BTC-on-Ethereum. Most DeFi users choose the most liquid option, and WBTC's network effects are substantial. The WBTC custody controversy created an opportunity, and Threshold has capitalized on it to grow tBTC adoption. The sustainability of this growth depends on continued DeFi integration and the broader market's sensitivity to decentralization properties.

The 5.6 score reflects strong technology and growing tBTC adoption, moderated by competition with WBTC, bridge risk, and the complexity of the merged protocol architecture.

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