Threshold Network has launched a fee-waiver mechanism for $T stakers to enhance the capital efficiency of its decentralized Bitcoin (BTC) bridge, tBTC.
The update allows users who lock $T tokens to offset bridge costs, effectively removing the 20-basis-point redemption fee that previously hindered arbitrage and liquidity.
By linking protocol usage to native token staking, the network aims to stabilize the 1:1 peg between tBTC and native Bitcoin.
The system operates on a 30-day rolling window, where every 100,000 $T staked provides the capacity to waive fees for 0.001 tBTC in minting or redemption activity.
Reducing the "Redemption Drag"
While tBTC minting remains free, the protocol traditionally charges a redemption fee of up to 20 basis points to support infrastructure security.
This cost often created a minor discount for tBTC on secondary markets, as market makers accounted for the expense of converting the asset back to Bitcoin.
The new waiver system permits active participants to neutralize these costs entirely through proportional staking.
Threshold co-founder MacLane Wilkison noted on social media that the mechanism is designed to ensure tBTC tracks Bitcoin without the persistent discount attributable to bridge fees.
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Market Efficiency and Arbitrage
The implementation targets high-frequency users, including market makers and institutional arbitrageurs, who manage large-scale Bitcoin flows across DeFi.
Improved arbitrage efficiency typically leads to tighter spreads and deeper liquidity across decentralized exchanges, benefiting even those users who do not personally stake $T tokens.
Unlike centralized alternatives, tBTC relies on threshold cryptography and a distributed signer set rather than a single custodian.
This update reinforces that decentralized model by incentivizing long-term holders to provide the very security and liquidity the protocol requires to scale.
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