Dear Investors,
As mentioned in previous updates, we have been setting up on the Canton blockchain. The Tie has published two of five parts of an article outlining the chain and its tokenomics. I recommend reading it here.
We are making a major bet on Canton. Unlike EVM and most other blockchains, Canton provides reliable, configurable infrastructure to a permissioned set of institutions, including Bank of America, Goldman Sachs, and Broadridge. This aligns with our mission to provide safe, compliant wrapped Bitcoin to institutions for sophisticated trading. Ethereum’s open, permissionless nature makes it difficult for professional institutions to use. We believe Canton is well-positioned to leverage Cumberland/DRW’s 30+ years of traditional finance experience and connections to serve this market.
The first application of iBTC will power VM/IM flows on BTC derivatives traded by QCP, DRW, and FalconX. Canton’s founder, Eric, estimates that once fully deployed with over 20 counterparties, iBTC will reach $50Mn in daily volume. The exact mint and burn fees from this are difficult to project, but rebalancing at that scale will be substantial. Additionally, by building into Canton’s application layer, we will earn commissions on trading fees.
A key advantage of iBTC is that it does not use a bridge, allowing institutions to mint it from Qualified Custodians such as BitGo, Anchorage, and Copper. Most wrapped Bitcoin, including Lombard LBTC and Threshold TBTC, are bridge-based. Since they allow anonymous (non-AML) retail participants to hold a key, the asset cannot be custodied by qualified institutions. MPC-based solutions also lack legal protections, making adoption by financial players difficult.
This reflects a broader trend: professional firms are entering Bitcoin finance, contrasting with traditional “BTCFi” solutions. A recent Bitcoin.com article highlights the risks of solvBTC. Solv operates an unlicensed, unregulated hedge fund with user deposits, lacking transparency, audits, and professional risk management—similar to Celsius and BlockFi. This creates a risk of catastrophic BTC loss. Additionally, their 0.2% withdrawal fee on all deposits exceeds industry norms, where fees are typically applied to yield alone.
In contrast, professional funds like Forteus—founded by the former CEO of Two Sigma, one of the most successful hedge funds—offer compliant Bitcoin investment options. Forteus’ Bitcoin fund delivers roughly 10% APY with proper risk management and regulatory oversight. As Bitcoin finance matures, institutional-grade solutions like Forteus will outcompete high-risk models like Solv.
Sales and Business Development
On the custodian front: we’ve run into delays with BitGo, due to a recent change in their leadership. However, our conversations with HexTrust, Anchorage and Copper are proceeding well. Alternative wrapped Bitcoins such as Lombard LBTC cannot be minted from Qualified Custodians – only MPC. Thus, they are unable to be used by professional asset managers. Our integration with QCs will unlock an audience that cannot be serviced by other providers.
In terms of trading institutions, we are finalizing our onboarding with Cumberland and engaging with traders at QCP, Susquehanna (SIG), MetAlpha, STS, and others.
We’ve sent liquidity provision proposals to our major LPs, including Bullish and Cumberland. Dialectic and others are soon to follow.
We’ve completed phase 1 of our work with StarkNet. BTC LPs will be able to earn 5-8% APY on STARK incentives alone, making it an interesting destination for low-risk returns.
Our iBTC-AUSD pool is live on AVAX! This is the first pool funded by VanEck. https://lfj.gg/avalanche/pool
We are excited about the upcoming launch of the Spectra pool, which will offer users a unique opportunity to acquire PT-iBTC at a discount and utilize it as collateral on platforms like Curve. PT-iBTC will be able to be acquired at a ~10% discount and used as borrow collateral on Curve and elsewhere.
Marketing and PR
We significantly ramped up community engagement through X spaces, hosting discussions with key BTCFi partners and qualified custodians. Notably, we were invited to the Arbitrum Founders Club Space to share insights on BTC liquidity use cases within the ecosystem.
Successful co-marketing campaigns were conducted with several partners, including Fortuna Custody, BIMA, Garden Finance, pStake Finance, Mellow, and Symbiotic, to expand our reach and brand awareness.
The iSat points program underwent significant improvements to enhance user engagement and rewards.
We leveraged improved internal tooling and AI to enhance our content creation process, resulting in more well-researched and informative materials.
We achieved an impressive milestone with over $5.1 million in iBTC options trading volume on Jasper Vault, demonstrating the growing interest in iBTC as a trading instrument.
The iBTC Network's new website is in development, with a focus on providing a user-friendly experience and valuable resources for our community.
We are implementing SEO improvements by integrating calculators and other useful tools to drive organic traffic and user engagement.
A comprehensive BTC yield source directory is in the works, providing users with a centralized platform to explore various yield opportunities within the iBTC ecosystem.
Product
A major focus this month for the Product and Engineering teams has been designing the iBTC + Canton system. We are running a devnet Canton node, developing into the Daml ecosystem, and working closely with the Canton + Digital Assets engineers to find the best solution to enable iBTC and Bitcoin on this exciting platform.
We have revamped our API system, which now provides better data, and is much faster, for our points calculations, yield monitoring tools, and various front-end endpoints.
BitGo integration continues to move forward, even while we look for other great custodial wallet solutions to partner with as well. During this past month, we finished a complete flow with some beta code for the new BitGo BTC features, which is great progress.
Internally we completed a nice refactor away from JavaScript and Ethers.js to a Rust-only solution for EVM connectivity from the Attestors. We hope to be able to do the same for XRP soon as well, eliminating the need to support JS at all, which would be a great simplification.
Testimonials
“You’re a better, faster, cheaper version of wBTC” – Head of Trading at a leading prime brokerage
“iBTC unlocks new staking yield opportunities for Bitcoin users.” – Felix Lutsch, Head of Ecosystem, Symbiotic
"You're sovereign Bitcoin for everything else” – Leading Bitcoin Investment Fund
Finance and Fundraising
We have secured around half of our round, with $2.5Mn left to raise.
Seed round investors include Cumberland Trading, Round 13 Digital, Contribution Capital, Web3.com Ventures as well as angels Yiannis Varelas, David Shin, Paul Taylor, Mayur Gupta and Matt Paik.
How You Can Help
We’re looking to meet more institutions that hold BTC and are looking for safe yields. These may include asset managers, trading desks, OTC desks, lenders, market makers and other financial institutions.
If you know any that aren’t familiar with iBTC, please introduce me via Telegram (@akibalogh) or email ([email protected]).
Best,
Aki
PS – Missed any of our previous Investor Updates? Read past editions here.
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