Introducing tLabs
tLabs is a proposed labs company with the single purpose of developing and maintaining tBTC and Threshold Network. This proposal outlines the role of tLabs in the Threshold community, its relationship to the DAO, and the strategy to ensure the long-term growth and success of Threshold DAO.
This proposal is motivated by a clear need to address the core challenges facing Threshold and tBTC:
- Stalled tBTC product and technical development
- Growth coordination challenges and unclear market position
- Undercapitalization and runway
- Limited tokenomic model.
It is proposed that tLabs lead protocol, product, business development and marketing functions for tBTC.
High-level goals of tLabs include:
- Increased tBTC TVL and bridge velocity
- Upgraded tBTC core technology
- Developed tBTC product and usability.
To fund this endeavour, tLabs will conduct a fundraise on behalf of Threshold DAO, with the outcomes of an extended runway for Threshold DAO, funding for tLabs, and the further decentralization of Threshold Network by engaging aligned investors.
The Future of Threshold
Threshold Network operates the most secure, most decentralized Bitcoin bridge in the market, and tBTC has the potential to become the canonical BTC token. A recent surge of interest in Bitcoin makes now the time to secure Threshold’s position.
How do we do it?
Let’s start by understanding where we are now.
tBTC development has stalled because of competing priorities in the previous development company. Threshold has enjoyed some success, but its first-mover advantage will decline.
tBTC v2 is just the MVP for the true potential of tBTC.
tBTC needs a forward-looking product and protocol vision, one that takes the core infrastructure of tBTC and builds with it something more functional, more scalable, and more economically sound.
Here is what tLabs plans to scope, design, and implement.
tBTC Protocol Upgrades
Tokenomics
Recent discussions of $T inflation and possible tokenomic models need alignment within a larger vision for Threshold. tLabs will design a new tokenomic model for the $T token that addresses the concerns of inflation and token value accrual, to be proposed and voted upon by the DAO.
BitVM2
New developments in Bitcoin core technology have demonstrated that Bitcoin bridges can dramatically improve their trust assumption models. Currently, Threshold’s tBTC operates on an honest majority trust assumption: the bridge is secure if there is an honest majority of wallet signers.
BitVM2 enables a 1-of-N trust model, which means that, for the bridge to operate, only one of the operators on any given wallet is required to be a good actor.
Implementing tBTC as a BitVM2-style bridge will require significant research, planning, and development but will ensure that tBTC remains the leader in Bitcoin bridging technology. This tech can be implemented on Threshold’s own application-specific chain.
Threshold App-chain
Part of the future vision of Threshold involves moving Threshold Network consensus to Threshold’s own chain, built from the current pool of Threshold nodes.
Threshold currently relies on Ethereum to coordinate wallet signing and maintain consensus between Threshold nodes. This also means that all tBTC minting and redemption must occur on Ethereum. All “native minting” implementations require routing via Ethereum, which limits functionality, increases (gas) costs, degrades UX, and maintains a reliance on Ethereum and other bridging protocols.
By transforming Threshold Network into an app chain, it will be possible to directly integrate with each blockchain where tBTC exists to deliver truly native minting, forming the Bitcoin liquidity and settlement layer between all chains.
Prioritization
Numerous exciting initiatives exist to be explored and implemented, but they require funding and alignment.
Upon approval of this proposal from DAO governance, the initial goals of tLabs will be to:
- Secure funding for Threshold DAO
- Formalize the relationship between Threshold Foundation and tLabs
- Propose a 1-year budget for tLabs from the DAO
- Share a product and technical roadmap for Threshold and tBTC.
Scope of Work
tLabs proposes to take on responsibility for the following aspects on behalf of Threshold Network:
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Protocol development
- Ensure that Threshold completes Schnorr signing schema upgrades
- Upgrade tBTC’s custody model to a 1-of-N honesty assumption via BitVM2 vaults (or similar)
- Update tBTC’s roadmap based on developments or changes in Bitcoin core tech (e.g. OP_CAT, OP_CTV)
- Manage the development of a Threshold app-chain
- Research, propose, and develop T tokenomic improvements.
-
Product development
- Develop and maintain the Threshold DApp
- Develop tBTC SDK
- Continue tBTC interchain deployments.
-
Marketing
- Create and define a clear product marketing strategy for tBTC
- Liaise with a leading marketing agency to handle marketing operations for tBTC.
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Threshold growth
- Liaise with DeFi protocols for tBTC integrations
- Collaborate with new L1 & L2 protocols to deploy tBTC
- Maintain tBTC and T token infrastructure listings (e.g. DefiLlama).
tLabs will not perform or be responsible for any operational aspects of Threshold Network, such as running nodes, hosting DApps, managing DAO treasury, or paying DAO expenses. Note: the scope above is broad and subject to resource constraints and prioritization.
Why do this as tLabs and not the DAO?
Although some of the scope is covered by the DAO today, tLabs proposes to move these functions into a more efficient and streamlined structure that aligns with a long-term product roadmap.
Threshold Network was founded on the principles of decentralization, and that will never change. However, the DAO has faced several coordination and execution challenges that can be ameliorated by delegating certain tasks and functions to a contracted entity, with the following advantages:
- Operational efficiency for the raise
- Deep technical expertise
- Ownership of long-term product roadmap
- Speed of execution
- Fiat payments to bank accounts.
Funding
We propose to mint ~1.12B $T tokens (a 10% dilution of the current supply)
- 7% - ~780M T will be sold to investors and key ecosystem participants to capitalize the DAO, and fund tLabs.
- Funds raised will be held by Threshold DAO.
- 3% - ~335M T will be granted to tLabs team members to be vested linearly over four years with a one-year cliff.
- Distribution will be subject to tLabs meeting key milestones or demonstrating meaningful progress towards these.
- Distribution approval will be determined by the Threshold Council.
- Milestones will be determined on approval of the proposal once key roadmap items have been identified.
- T will be distributed to tLabs team members as long-term alignment incentives to ensure retention of top industry talent and protocol-aligned outcomes.
The raise will commence on approval of this proposal. Unused earmarked funds will be managed at the discretion of the DAO. In the event of cessation of the arrangement between tLabs and the DAO, vested tokens will be distributed pro rata upon handover of work completed up to the cessation date.
Alignment and Continuity
tLabs and Threshold DAO will be synergistic organizations that both work to grow and maintain Threshold Network. tLabs exists for the sole purpose of developing tBTC and Threshold Network and any intellectual property developed will be assigned to Threshold Foundation and/or released under the appropriate open source license…
tLabs will fulfil the technical, strategic, growth, and marketing requirements of tBTC.
Threshold DAO will continue to operate independently and to manage the DAO treasury, grant applications and distributions, and community-led events and initiatives.
Threshold DAO will act as the custodian of all raised funds, and it will approve yearly budgets to tLabs based on their requirements. If tLabs fails to perform to the DAO’s expectations, the DAO can elect to end the engagement via an onchain vote.
tLabs will present a quarterly activities summary to the DAO to identify key progress that occurred in the previous quarter.
tLabs will aim to maintain momentum within the existing growth and product development projects while aligning them with the broader strategy tLabs proposes for Threshold DAO. The DAO will be able to decide on an operational and organizational structure that suits its needs in the light of the functions that tLabs will take responsibility for.
tLabs and Team
tLabs will be led by MacLane and Sap. MacLane is the founder of NuCypher (the predecessor network of Threshold) and Sap brings a wealth of experience in tBTC growth, communication, and product design. Importantly, both are deeply familiar with tBTC and have extensive experience coordinating with the DAO to achieve Threshold-aligned outcomes.
Team members will be sourced from leading industry talent and from existing DAO roles where suitable. The hiring process will commence on the completion of the raise and be at the discretion of tLabs.
MacLane will not accept any compensation from tLabs or Threshold DAO (except in the unlikely event it is required to comply with applicable minimum wage/employment laws).
Close
This proposal introduces a number of new ideas and concepts, so please share your thoughts. The opportunity that presents itself to the Threshold community is incredibly exciting, but timing is of the essence. Threshold is in a crucial market moment that, if captured, will secure tBTC’s position as the Bitcoin-standard of DeFi assets.