Core Security Features

Fortifying iBTC with Cutting-Edge Safeguards

iBTC’s security architecture is built to eliminate the vulnerabilities plaguing traditional BTC-Fi—custodians, bridges, and opaque reserves. By leveraging Bitcoin Layer 1’s strength and advanced cryptography, iBTC ensures your assets are protected at every step. Let’s break down the fortress-like features that set iBTC apart.

2-of-2 Multisig Vaults

• Mechanism: Each iBTC vault on Bitcoin Layer 1 requires two signatures—one from a KYB-verified merchant and one from the decentralized Attestor Network (e.g., 10-of-15 quorum).

• Benefit: Prevents unilateral control, eliminating single points of failure.

• Technical Detail: Uses Partially Signed Bitcoin Transactions (PSBTs) to lock BTC, ensuring no smart contract exposure on Bitcoin, unlike Ethereum-based wrappers.

• Impact: Mitigates risks seen in custodial failures (e.g., Mt. Gox’s $140B loss, DOC6 PAGE2).

FROST (Flexible Round-Optimized Schnorr Threshold Signatures)

• Mechanism: A threshold signature scheme where multiple attestors co-sign transactions, reducing signature size from 500+ bytes (traditional multisig) to ~100 bytes.

• Benefit: Lowers transaction fees and enhances efficiency while maintaining security.

• Technical Detail: Supports dynamic signer updates (e.g., adding/removing attestors) without on-chain fund movements, leveraging Schnorr’s aggregation properties.

• Impact: Ensures resilience against collusion or node failures, a step beyond standard multisig.

Chainlink Proof of Reserve (PoR)

• Mechanism: Real-time, on-chain verification that iBTC supply matches BTC reserves, using Chainlink’s oracle network.

• Benefit: Guarantees 1:1 backing, preventing over-minting or reserve manipulation.

• Technical Detail: PoR feeds (e.g., Arbitrum, Base) update every epoch, cross-checked by attestors. Example: If 1,000 iBTC are minted, 1,000 BTC must be locked.

• Impact: Addresses TVL inflation issues (e.g., Solv’s double-counting), building investor trust.

MPC (Multi-Party Computation) Wallet Support

• Mechanism: Institutions can use MPC wallets to split private keys across multiple parties, reducing compromise risk.

• Benefit: Adds an extra layer of security for large BTC holders (e.g., whales, BlackRock).

• Technical Detail: Integrates with QCs like Ledger and Fordefi, enabling threshold-based key management off-chain.

• Impact: Complements multisig, minimizing insider threats in institutional settings.

Audited Smart Contracts

• Mechanism: Ethereum-based contracts (e.g., AttestorManager) undergo regular third-party audits and continuous security reviews.

• Benefit: Ensures no vulnerabilities in minting/redemption logic.

• Technical Detail: Health monitoring system tracks contract states, alerting engineers to anomalies via automated reports.

• Impact: Reduces smart contract risks (e.g., hacks costing billions), a key concern for DeFi users.

Why This Matters

iBTC’s security features tackle BTCFi’s Achilles’ heels—bridge exploits ($1.56B lost) and custodial risks. With a decentralized, auditable design, making it a beacon of trust in a murky landscape.