Threshold Network's tBTC bridge has resumed onchain operations after a nine-day security pause, but an Aave reserve holding roughly $120 million in tBTC remains frozen to new deposits and borrowing against the token.

On Sunday, Threshold said in a post on X that the bridge's underlying network was restarting as security-patched node operators reconnected. These independent operators collectively authorize Bitcoin movements and process deposits and redemptions. The reconnection of patched nodes restores the deposit-and-redemption flow that carries Bitcoin liquidity into Ethereum lending markets, though Aave's continuing freeze means part of that pathway stays closed for now.

Requests submitted before the shutdown are expected to be processed as more operators return, but the app will not accept new deposits, minting or redemptions until enough nodes are online. Threshold did not announce a date for a full restart.

About tBTC and Threshold Network

tBTC is Threshold Network's decentralized bridge for putting Bitcoin to work on Ethereum. Each tBTC token is designed to be backed one-to-one by Bitcoin held by a decentralized set of independent signers rather than a single custodian, allowing Bitcoin holders to deploy their assets in decentralized finance applications such as lending and borrowing. Threshold Network was formed through the 2022 merger of the Keep Network and NuCypher protocols. Because Bitcoin's native blockchain does not support smart contracts, tokenized versions of BTC such as tBTC serve as one of the main channels through which Bitcoin liquidity enters DeFi. Aave, where the frozen reserve sits, is one of the largest decentralized lending protocols and operates across multiple blockchain networks. This pause shows that dependency in action: when a bridge's signer infrastructure goes offline, lending protocols holding the token can restrict it, and Aave moved to limit its tBTC exposure the day after the bridge was halted.

Timeline of the pause

Threshold had halted the bridge on Oct. 30 while operators addressed a critical Linux kernel vulnerability that could allow remote attackers to execute code on unpatched servers. The project said it found no evidence that the flaw was exploited against tBTC nodes. The halt allowed operators to patch their servers before any exploitation was confirmed, but it also left the bridge unable to process deposits or redemptions for nine days.

Aave froze its tBTC reserve on Ethereum Core on Oct. 31 to prevent additional exposure while redemptions were unavailable. The restriction stops new tBTC deposits and prevents the token from adding borrowing power, while existing users can still withdraw and repay loans.

Reserve status and next steps

Threshold said roughly 4,320 BTC remains in bridge wallets against about 4,185 tBTC in circulation, with no unauthorized Bitcoin transfers or token minting detected. That surplus of about 135 BTC over circulating supply is consistent with the bridge's one-to-one backing design.

In a post on Aave's governance forum, Aave risk provider LlamaRisk said it would propose restoring the reserve after Threshold's operations return to normal. The reserve's restoration is therefore tied to two open items: LlamaRisk's forthcoming proposal on the forum and a full bridge restart for which Threshold has given no date. Until then, the roughly $120 million reserve remains limited to withdrawals and loan repayments.

Related: Threshold: Upgraded bridge to funnel $500B institutional BTC into DeFi

Source: Cointelegraph