Threshold Network said on Saturday that tBTC, its decentralized wrapped-bitcoin token, is fully backed, with 4,320 BTC in its bridge wallets against roughly 4,185 tBTC in circulation. The statement is the project’s first word on solvency since it paused tBTC minting and redemptions late on Friday, October 30, for undisclosed “security maintenance.” The bridge is still shut with no restart date, and Aave’s tBTC market on Ethereum remains frozen, so holders can move the token but cannot redeem it for bitcoin through Threshold.
What Threshold said
“tBTC remains fully backed and no funds have been lost,” Threshold said in its Saturday update. “Currently, 4,320 BTC sits in the bridge wallets against roughly 4,185 tBTC in circulation, and we’ve seen no unauthorized minting.”
New deposits, mints and redemptions remain paused “while security maintenance on the bridge is completed,” the project said. It added: “The situation is contained and bridge functionality will resume once a full remediation is in place.” Deposits or redemptions already in progress will complete after operations resume, and Threshold asked users not to send BTC to previously generated deposit addresses or repeat transactions in the meantime. tBTC continues to transfer normally on Ethereum and layer-2 networks, it said.
Threshold has not said what the maintenance involves or what prompted it. It has not described a vulnerability. “We’ll post the next update within 24 hours, or sooner if anything changes,” the project said.
Checking the numbers
The supply side matches. The tBTC token contract on Ethereum reported a total supply of 4,185.155 tBTC on Saturday, according to Etherscan and a direct query of the contract by AltcoinReporter. Etherscan listed 24,565 holders.
The reserve side took more work. Threshold pointed readers to the wallets tab of its own explorer, which lists 56 Bitcoin wallets, 44 marked active and 12 historical. By Saturday evening it showed a total balance of 4,320.58 BTC. AltcoinReporter pulled the balance of all 56 addresses from the public block explorer mempool.space. They added up to about 4,320.46 BTC, in line with Threshold’s figure. Six wallets held almost all of it, the largest about 1,530 BTC.
On those numbers, reserves exceed supply by about 135 BTC, or roughly 3%. One caveat: the wallet list is Threshold’s own, published in its app. AltcoinReporter did not separately confirm against the bridge contracts that the list is complete.
The market has not priced in a shortfall. At about 19:45 UTC on Saturday, CoinGecko showed tBTC at about $77,600 and bitcoin at about $77,500, so the token was trading at par.
Why the pause matters even with full backing
A wrapped asset usually holds its peg because holders can redeem it for the underlying coin. When tBTC trades below bitcoin, traders can buy it cheaply and redeem it for BTC. With redemptions paused, that route is closed. A holder who wants bitcoin now has to sell tBTC on the open market, and the price depends on buyers who are willing to wait for the bridge to reopen.
The original pause notice on Friday described the step as “a precaution while security maintenance is completed.” It said pending redemptions may still be paid on Bitcoin, but final settlement on Ethereum is paused and some transactions may be delayed. “This pause does not affect holding, transferring or using tBTC,” Threshold said at the time.
Aave froze its tBTC market
Aave holds a large share of the token. Risk manager LlamaRisk recommended a pre-emptive freeze of tBTC on Aave V3’s Ethereum Core market, and the guardian multisig executed it on Saturday morning, hours before Threshold’s reserves update, according to LlamaRisk’s post on the Aave governance forum. The aim, LlamaRisk wrote, is to stop Aave’s exposure from growing “until the incident is confirmed to be fully mitigated by Threshold.”
The freeze blocks new tBTC deposits and stops tBTC from adding borrowing power. Users can still repay and withdraw, liquidations continue, and tBTC keeps its liquidation threshold, so existing health factors do not change. No other reserve is affected. The Base and Arbitrum tBTC reserves were already frozen in earlier deprecation rounds. AltcoinReporter covered that broader cleanup when Aave moved to deprecate 50 reserves.
The Aave Ethereum tBTC receipt token (aEthtBTC) had a supply of about 1,757.9 on Saturday, per Etherscan. That is roughly $136 million at Saturday’s price and about 42% of tBTC’s total supply.
What to watch next
Threshold’s next update is due within 24 hours of Saturday’s post. The key details are what the maintenance fixed, whether an outside review is involved, and when deposits and redemptions restart. LlamaRisk said it will propose restorative measures on Aave once tBTC operations return to normal.
The tBTC price is the other signal. The token has held its peg so far. A discount opening up would show that holders want out faster than the bridge can reopen. The episode also adds to the argument over admin controls in DeFi, which AltcoinReporter covered in a piece on whether protocols should have emergency brakes.
FAQ
Has Threshold lost any bitcoin? Threshold says no. It said no funds have been lost and it has seen no unauthorized minting. It describes the pause as security maintenance and has not given details.
Can I still use or redeem tBTC? You can hold and transfer tBTC on Ethereum and layer-2 networks. New mints and redemptions through Threshold are paused, and on Aave’s Ethereum Core market you can repay and withdraw but not supply new tBTC.
Is the 4,320 BTC figure verified? It is Threshold’s figure. AltcoinReporter checked all 56 wallet addresses listed in Threshold’s explorer on mempool.space and got about 4,320.46 BTC, but the list is Threshold’s own and AltcoinReporter did not independently confirm that it is complete.
Disclaimer: This article is for informational purposes only and does not constitute financial advice.
