The failure of tBTC

An announcement was made of the failure of the tBTC project, which had just been launched on the mainnet.

tBTC lasted on mainnet two days. Alas, it was born before it's time.

Goodnight, sweet prince🌹

We've pulled the red lever, pausing deposits for the next 10 days, and are helping users drain funds. We'll publish a full post-mortem when confirmed… and we will rise again.

— Matt Luongo ✜ (@mhluongo) May 18, 2020

tBTC had developed a system similar to the various tokens pegged to Bitcoin (BTC), in which the tBTC token, an ERC20 token, allowed to simulate the bitcoin supply by means of a procedure by which BTC had to be deposited in order to have tBTC and vice versa. 

As can be read from the tweet, the landing on the mainnet happened 2 days ago, but unfortunately, it didn’t work and it was necessary to take an emergency measure, namely to stop and pause the new deposits, in order to allow developers to warn users of what happened. 

From the little information that has been communicated, in anticipation of a real official release, it is known that there was a bug discovered by Antonio Salazar Cardozo, chief engineer of Thesis, and also confirmed by James Prestwich, founder of Summa and bitcoin developer. 

Everything happened in the wake of an audit that was scheduled in these days, in which there will be the opportunity to examine this issue in detail. 

The criticisms in the comments arrived quickly and show that tBTC only noticed the problem thanks to the intervention of people outside its team and that, if this had not been the case, a real catastrophe could have occurred. 

Unfortunately, it seems that tBTC is still far from having a valid bitcoin replacement to be implemented within decentralized finance (DeFi), not least because the multitude of pegged tokens is really impressive, such as the most famous pTokens. 

Moreover, these tokens have turned out to be more versatile than the Lightning Network protocol, and indeed on the Ethereum blockchain, there are now a lot of bitcoin tokens, with more than double the number of those found on the Lightning Network.