TON Teleport BTC: New Wrapped Bitcoin on TON Blockchain

TON Teleport is a trustless bridge allowing users to securely transfer BTC between the Bitcoin and TON blockchains without central intermediaries. The bridge is presently in the testnet phase, with its launch planned for the second quarter of 2025.

Alexander Mardar

Dec 04, 2024 - 2 min read

The Ton Foundation has announced the launch of TON Teleport BTC, a bridge enabling BTC transfers to the TON Blockchain. This innovation aims to establish Bitcoin Finance (BTCFi) on TON and introduce new liquidity into the DeFi ecosystem.

To use the bridge, users transfer BTC to a unique Bitcoin address provided by TON Teleport. Once the Bitcoin network confirms the transaction, an equivalent amount of tgBTC is issued on the TON blockchain. Users can then freely use tgBTC within the TON ecosystem or convert it back to Bitcoin by burning tgBTC. Since tgBTC is fully backed by BTC deposits, it is designed to maintain a 1:1 peg with real Bitcoin.

A primary concern for users is the security of BTC custodianship by TON Teleport. However, the developers have emphasized the system’s reliance on “next-generation security mechanisms” to safeguard user assets.

One key feature is Distributed Key Generation (DKG), which ensures that no single validator has unilateral control over the funds. Control is distributed among multiple validators, reducing the risk of mismanagement or theft. Validators on TON rotate every 18 hours, and during each rotation, public keys are updated, transferring control over Bitcoin custody to the new validator group. Withdrawals require approval from the top validators by stake on the TON master chain, using a multi-signature approach that ensures majority consensus for transactions.

To further enhance security, specialized monitors continuously analyze transaction patterns. If irregular activity is detected, the system can be temporarily paused to minimize potential losses from breaches.

While secure, the system has some limitations. Users are provided with deposit addresses that expire every four hours. If funds are sent to an expired address, users must go through a refund process. Fortunately, the system supports refunds for such cases. Additionally, the withdrawal process is not instant. To minimize fees, withdrawal transactions are batched, which can introduce delays. Users may also encounter challenges with high fees or stacked transactions during deposits or withdrawals, which could impact the overall user experience.

Despite these challenges, the introduction of Bitcoin on the TON blockchain represents a significant milestone. With tgBTC, users gain access to enhanced DeFi and yield-generation opportunities within the TON ecosystem. tgBTC can be used as collateral for borrowing stablecoins, as a payment medium within the ecosystem, or for staking and other yield-generating activities. Currently, the TVL of TON DeFi stands at approximately $330 million. The introduction of tgBTC has the potential to significantly increase this figure as more DeFi applications integrate tgBTC into their workflows.

Meanwhile, the competition in the “Wrapped BTC market” has been heating up recently, with a growing rivalry between Coinbase and WBTC, one of the largest wrapped Bitcoin tokens on Ethereum. It seems Coinbase is aggressively promoting its own version, cbBTC, using questionable practices, such as delisting WBTC from its exchange. Meanwhile, tgBTC, a newcomer to the market, may face significant competition not only outside the TON ecosystem but potentially within it as well, should other players take an interest in TON.

At the moment, TON Teleport BTC is in its testnet phase, with a full rollout scheduled for Q2 2025.