Threshold upgrade lets institutional bitcoin stay in custody while earning yield onchain

Threshold Network has rolled out a major upgrade to its bitcoin bridge protocol tBTC, introducing features that let institutions earn yield in decentralized finance markets without moving bitcoin out of regulated custody.

The upgrade connects custodial wallets directly to DeFi applications through a decentralized verification layer. Institutions can mint and redeem tokenized bitcoin onchain while the underlying BTC remains in insured, compliant vaults.

New tools in the tBTC app include gas-free minting, simplified redemption to the Bitcoin mainnet, and vault interfaces for yield-bearing strategies across Ethereum, Arbitrum, Base, Polygon, Sui, and other chains.

Threshold said the redesign cuts operational risk and removes the technical friction that previously limited institutional participation.

Threshold says the upgrade targets more than $500 billion in bitcoin controlled by top institutional and whale addresses, much of which has remained largely idle under custody requirements.

If adopted, the changes could bring more of that supply into tokenized circulation and expand liquidity across DeFi markets.

Threshold secures deposits through a 51-of-100 threshold signer model, a setup that requires a majority of 100 independent nodes to jointly approve transactions, removing any single point of custody or control.