Threshold Network

Threshold Network DAO (decentralized protocol)

decentralised protocol

Risk Rating

1/5

Minimal

Established

2022-01-01

Custody Since

2023-02-01

Assets Under Custody

$0.5B

Risk Assessment

regulatory standing5/25

proof of reserves quality22/25

counterparty concentration2/25

operational historical8/25

Assessment Rationale

tBTC via Threshold Network represents minimal custodial risk due to decentralized architecture. No single custodian - 51-of-100 threshold signature scheme across independent node operators. On-chain verifiable proof of reserves provides real-time transparency (22/25). No counterparty concentration risk (2/25) - funds distributed across geographically diverse node set. However: (1) No formal regulatory authorization (Regulatory Standing: 5/25), (2) Transaction malleability vulnerability history (Aug 2023, fixed), (3) Protocol complexity requires technical expertise, (4) ESMA guidance on DeFi protocols pending. MiCA Recital 22 suggests fully decentralized services fall outside scope.

Historical Incidents

Transaction Malleability Vulnerability in SPV Proof Verifier

high

2023-08-20

Whitehat Kayaba identified a vulnerability in tBTC's SPV proof verifier related to Bitcoin transaction malleability. The vulnerability could potentially allow arbitrary transaction inclusion through brute force.

Resolution: Fixed by implementing coinbase transaction validation and Merkle proof length checks. $50,000 bounty paid to whitehat.

Proof of Reserves

Methodology

on chain verifiable

Frequency

real_time

Limitations

On-chain verification requires technical expertise
Protocol complexity may deter some users

Supported Assets

tBTC

Jurisdictions

Quick Links

Official Website Contract Registry

Disclaimer

Risk ratings and regulatory information are for educational purposes only. Always conduct your own due diligence before selecting a custodian. Not financial or legal advice.