Unlocking the future of Bitcoin with TON Teleport BTC: A new era of trustless interoperability

Bitcoin has long been recognized as a powerful growth driver for the cryptocurrency industry. As a digital asset, it is a store of value and an essential liquidity provider for decentralized finance (DeFi). TON Teleport BTC builds on Bitcoin’s foundational principles to integrate its liquidity with TON's ecosystem, offering enhanced yield opportunities, distribution capabilities, and security innovations.

The TON Teleport BTC whitepaper outlines a trustless interoperability solution between Bitcoin and the TON network. TON Teleport BTC serves as an example of trustless interoperability, allowing transactions across Bitcoin and TON without intermediaries. Key to its function is a decentralized framework where validators, incentivized by TON’s consensus protocol, ensure security and seamless operations across both chains.

This article examines how TON Teleport BTC integrates cross-chain functions by leveraging Bitcoin and TON’s native security features.

What is TON Teleport BTC?

TON Teleport BTC embodies the spirit of Bitcoin by eliminating intermediaries and promoting decentralized, trustless transactions. By combining Bitcoin's liquidity, the yield-generating potential of TON's DeFi infrastructure, and the distribution reach enabled by TON's partnership with Telegram, TON Teleport BTC introduces tgBTC - a tokenized Bitcoin designed to maximize utility while maintaining security and accessibility.

Through BTC’s tokenized representation, tgBTC, TON Teleport BTC facilitates cross-chain BTC transfers within the TON ecosystem. Users actively convert BTC into tgBTC (Peg-in) and back (Peg-out), bypassing centralized entities to enhance decentralization and security.

Key advantages of TON Teleport BTC

Let’s start by highlighting the benefits of Bitcoin on TON enabled by TON Teleport BTC:

• Yield generation: Bitcoin holders can earn more by leveraging tgBTC in DeFi protocols, including lending, staking, and trading.
• Liquidity accessibility: With Bitcoin providing robust liquidity, tgBTC facilitates efficient collateralization and yield farming.
• Affordable and efficient: tgBTC transactions are 10x cheaper than standard Jetton tokens, making Bitcoin integration on TON practical and accessible to all users.

With TON Teleport BTC, users will also experience:

• Reliable, trustless, permissionless: Decentralized control shared among independent participants ensures no single entity can interfere, promoting integrity and security.
• Enhanced security: Uses Bitcoin and TON blockchains, with validators acting as oracles, to protect BTC transactions.
• Transparency: Each tgBTC is backed 1:1 by BTC, allowing users to verify asset backing and flow independently.

Below are TON Teleport BTC’s core functions.

Peg-in and peg-out: the core processes of TON Teleport BTC

Transferring BTC into and out of the TON network involves several automated steps:

Peg-in (tgBTC deposit)

1. The mechanism: Users send BTC to a specified Bitcoin address, triggering a smart contract that mints tgBTC on TON after six block confirmations.
2. An automated process: The peg-in process is fully automated and relies on TON’s Light Client technology. The Light Client verifies Bitcoin blocks autonomously, ensuring trustless operations without external reliance.
3. The advantage: Once BTC is on TON, transactions are processed at TON’s standard network speeds.
   

While the peg-in process may be slower due to Bitcoin’s confirmation requirements, once on TON, transactions return to standard network speeds.

Peg-out (tgBTC withdrawal)

tgBTC withdrawal involves two crucial aspects:

1. Mechanism: To withdraw BTC, users burn their tgBTC on TON, initiating a transaction that securely releases BTC to the specified address.
2. Security: Validators on TON oversee the Peg-Out process, ensuring that Bitcoin unlocking adheres to all pre-verified parameters.

This process eliminates double-spending by confirming the user’s intention through the burn and then securely transferring BTC. Peg-out, like peg-in, is fully automated and requires no human intervention.

Keeping transaction costs under control

Aggregated signature technology in TON Teleport BTC controls transaction costs by replacing the traditional multi-signature method with a single group signature, which typically requires multiple individual signatures.

Here's how it works:

TON Teleport BTC uses group signatures to combine multiple validator signatures into one, decreasing transaction size and fees on the Bitcoin network. With the Bitcoin Taproot upgrade, TON Teleport BTC now benefits from aggregated signatures, thanks to the efficiency of Schnorr signatures.

Through Bitcoin's Taproot upgrade, we're also cutting costs while improving security and decentralization to optimize BTC transactions. By reducing the transaction size, TON Teleport BTC ensures you can move your assets with lower fees.

Additional security features for reliable performance

TON Teleport BTC goes beyond basic peg-in and peg-out with additional security mechanisms to protect users and assets.

• Validator rotations: Validators on TON rotate every 18 hours, distributing transaction verification among a changing group of participants. Each rotation updates public keys and transfers Bitcoin control to the current validator group.
• Refunds for expired deposits: A refund mechanism lets users reclaim funds if a Bitcoin deposit fails to complete before a validator rotation. Users set up a Check-Sequence Verify (CSV) script that refunds BTC if the transaction remains incomplete within a specified period (typically two weeks).
• Consensus-based upgrades: Validators reach consensus to update system components, allowing for flexible enhancements like contract upgrades or added security features without compromising system integrity.
• Inspectors: They monitor transactions, temporarily pausing the system if it detects irregular activity. Inspectors cannot alter transactions but add a safeguard against potential risks.

Adopting cryptographic advancements to bolster security

TON Teleport BTC employs modern cryptographic technologies, including:

• Distributed Key Generation (DKG): It ensures no single validator can act unilaterally, maintaining decentralization.
• FROST (Flexible Round-Optimized Schnorr Threshold Signatures): Aggregates validator signatures, significantly reducing Bitcoin transaction fees.

BTCFi: Next generation DeFi on TON

TON Teleport BTC activates additional yield generation within the TON ecosystem by leveraging Bitcoin's liquidity, enabling functionalities like on-chain trading, liquidity provision, and lending. Each tgBTC in the system is fully backed by actual BTC held in smart contracts, ensuring value transparency and verification without relying on intermediaries. TON Teleport BTC structure may potentially connect TON with other blockchain networks for cross-platform interactions.

tgBTC introduces arbitrage potential across platforms to leverage liquidity imbalances and promote active trading. TON Teleport BTC also aims to enhance Bitcoin’s scalability and cross-chain interoperability, contributing to a trustless, DeFi environment where Bitcoin’s liquidity and utility evolve.

Below is a summary of Bitcoin’s potential in TON’s DeFi ecosystem:

• tgBTC can serve as collateral for borrowing stablecoins, supporting liquidity pools, and leveraged trading in lending protocols
• tgBTC-backed assets power collateralized debt positions (CDPs), similar to MakerDAO’s model DAI.
• Through partnerships like GoMining, users can rent GPUs, pay for energy, and mine Bitcoin, withdrawing earnings directly in TON,

TON Teleport BTC improves existing yield generation methodologies and paves the way for a future where Bitcoin's liquidity and utility are enhanced through decentralized systems, with TON at the core. TON Teleport BTC takes Bitcoin to a new level, opening doors for it to move smoothly across blockchains—an exciting step forward for cross-chain tech and what’s next in crypto.

To read the full TON Teleport BTC Whitepaper please click here.