The Keep Network, a privacy layer for Ethereum, has closed a private $7.7M token sale led by Paradigm, Fenbushi Capital, ParaFI Capital, A.Capital, and Collaborative Fund. The Keep Network is an open-source contributor to the tBTC project, which enables Bitcoin-based assets to be deployed on the Ethereum blockchain.
“Decentralized financial applications on Ethereum have seen clear demand,” Paradigm co-founder Fred Ehrsam, who also co-founded Bitcoin exchange Coinbase, said in an e-mailed statement. "Bitcoin is the world's largest cryptocurrency. Building a bridge that allows Bitcoin to interact with DeFi makes a lot of sense, and tBTC is a credible attempt to do exactly that."
The inspiration for tBTC dates back to when Matt Luongo, the founder of Keep Network parent Thesis.co, and his wife found a house they wanted to buy.
“It’s time to sell your Bitcoin,” she said.
“The hell it is,” Luongo replied. “I don’t want to sell.”
“What have we been saving for, if not a house?” she asked.
“Well…” he replied.
He at once started looking for somewhere he could get a Bitcoin collateralized loan so he could buy the house. He found a lender he had been told was crypto friendly. The lender loved crypto. “Sell me your Bitcoin, come back in 30 days, and we’ll pretend we never had this conversation,” said the lender.
But, Luongo wasn’t concerned with privacy or secrecy or whatever the lender was implying. He simply didn’t want to sell his Bitcoin. He’d rather hold and use them as collateral.
Since then, the space has matured, Luongo said, highlighting the novel rate lending products mostly targeting high net worth individuals. The experience of trying to use Bitcoin as collateral to buy a house got him thinking about tBTC, a decentralized redeemable BTC-backed ERC-20 Token. It’s an attempt to bring Bitcoin to Ethereum, enabling the creation of a tBTC asset within the Ethereum ecosystem.