Iron Fish has two core value propositions — world-class privacy via zero-knowledge proofs, and multi-asset support.
From the site today:
Multi-asset functionality enables bridge providers to transfer any crypto asset to the Iron Fish network for private transactions.
Unfortunately, no bridge providers are live today. In partnership with Iron Fish, Thesis would like to change that, bringing Iron Fish’s robust privacy to the largest asset and community in the crypto space — Bitcoin.
Background
I’m a crypto dev and the founder of Thesis, the studio behind tBTC, Fold, and Taho. I’ve known Elena since 2017, and am a small angel investor ($10k) in IF Labs.
Thesis works heavily across the Bitcoin and Ethereum ecosystems, with further experience and expertise across Zcash and Cosmos.
In the Bitcoin and Ethereum ecosystems, we built tBTC — tokenizing BTC for use across DeFi with threshold cryptography — as well as projects like Saddle and Taho. We also championed and implemented EIP-152, which added a Blake2 precompile to Ethereum, and took it to mainnet. We further engaged in the Zcash community governance process by , proposing ZIP-1011, which was folded into their current governance structure.
Most recently, we proposed a potential governance structure for Iron Fish.
Desiderata
We propose building a bridge to Iron Fish that delivers on the following criteria:
- Enables a simple deposit experience for Bitcoiners, potentially unfamiliar with Iron Fish, Ethereum, or other chains.
- Enables a simple deposit experience for existing tBTC and WBTC holders, across chains like Ethereum, Arbitrum, Optimism, Polygon, Base, and Solana.
- Delivers value incrementally, rather than a year from now.
- Includes flexibility around Iron Fish network upgrades, including a potential PoW change.
- Builds on decentralized custody from day 1, avoiding centralized points of failure.
- Enables multiple, independent front-ends to mitigate the risk of censorship.
Architectural Approach
The latest version of tBTC uses a decentralized network of custodians to tokenize Bitcoin on Ethereum and other smart contract chains. It does this by accepting deposits with 51-of-100 threshold ECDSA wallets, with signers sampled from Threshold network stakers. As deposits arrive, they’re proven on Ethereum via an SPV relay, allowing tBTC to be minted.
Once tBTC is minted on Ethereum, it can be bridged to many other networks, most popularly via Wormhole.
Because Iron Fish doesn’t have smart contracts, we unfortunately can’t make use of popular bridging projects. Instead, we propose to build a decentralized minting authority to manage tBTC on the network.
We can achieve that by adding a new type of FROST signing group to the tBTC system — a FROST signing group to mint and redeem tBTC on Iron Fish.
Initially, we’ll use a single signing group. Upon a network upgrade to Iron Fish to enable migrating asset ownership, we’ll move to a rotating group scheme to better ensure signer liveness.
This approach gives us the flexibility to iteratively roll out the bridge without relying on a small group of custodians. Once asset ownershp migration is live, we’ll be able to further grow signing groups for even better security.
To better understand the iterative approach to a rollout, please refer to the Milestones section.
Team Structure
The project will consist of several phases including design and development, in addition to continuous co-marketing initiatives. The team will consist of 2-8 people , fluctuating based on the needs of the respective phases of design, development and marketing. In order to maintain continuity, a project manager and tech lead will be deployed for the entire duration of the project lifecycle.
Communication
We propose a transparent, asynchronous communication approach, which includes:
- Monthly progress updates in the forum.
- Async availability in the Iron Fish Discord.
- Continuous async communication between the Thesis and Iron Fish teams to ensure alignment on milestones and deliverables.
- Thesis and Iron Fish co-marketing initiatives.
Milestones, Deliverables, and Performance
We have two principles behind our proposed milestone and payment schedule.
- Deliver value early and often — we want to ensure we can hear from users as quickly as possible, and that means shipping to mainnet more frequently, not less.
- Align with the ecosystem — we want to be in it for the long haul,
For these reasons, we propose splitting the project into a mixed deliverable and performance-based structure. This structure means we can ensure we cover our costs, while aligning us with the ecosystem around a common goal: moving as much BTC onto Iron Fish as possible.
Milestones
Phase 0 — Project Initiation (In Progress)
Thesis is putting together a team, including a project manager, a designer, and a team of developers. We’re familiarizing ourselves with the Iron Fish ecosystem and code base, validating my architectural assumptions, and getting up to speed on current community discussions.
Upon proposal acceptance, Thesis earns $250k in IRON, using a weekly average price on a mutually agreed exchange. These funds will be locked for a minimum of 6 months.
As of today, Phase 0 is already in progress. Our project team has been researching Iron Fish closely, and we’ll be ready to start development work as early as September 4, 2023.
Phase I — Minting
The first phase of the project focuses on minting.
Beginning with minting alone rather than an end-to-end bridge means we can start building interest and confidence in the system earlier, without sacrificing decentralized custody or taking other shortcuts.
Users will be able to mint tBTC on Iron Fish using BTC from the L1 Bitcoin network, as well as existing tBTC and WBTC on Ethereum. Initially, this will take place in the tBTC dApp.
At the completion of Phase I, upon acceptance by the Foundation, Thesis earns $250k in USD.
Phase II — Redemptions
The second phase of the project enables redemptions.
Users will be able to redeem tBTC on Iron FIsh for tBTC or WBTC on Ethereum, or BTC on the L1 Bitcoin network. Initially, this will take place in the tBTC dApp.
To accomplish this, we’ll employ a multisig-based state relay to inform the Ethereum chain of a redemption. This approach means redemptions can be turned on earlier, while still relying on the Threshold network for decentralized custody.
At the completion of Phase II, upon acceptance by the Foundation, Thesis earns $250k in USD.
Phase III — Developer and User Experience
The third phase is about improving the developer and user experience of tBTC on Iron Fish, and can be worked on in parallel with phase IV.
In our experience, there will be 3 areas of improvement in the product to further grow deposits.
- Gasless user experience
- Many depositors will have never used Iron Fish, Ethereum, or any other non-Bitcoin chain before.
- Depositors shouldn’t need IRON or ETH to mint tBTC on Iron Fish. New depositors should receive a de minimis amount of IRON, covered by a small fee from their deposit.
- This experience will be accomplished via a gas relay.
- Cross-chain user experience
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- Other depositors will not only have used Bitcoin, but also Ethereum Solana, Arbitrum, Polygon, Optimism, or Base.
- These depositors should be able to mint tBTC on Iron Fish from any supported network, using existing tBTC or WBTC.
- Simple integration experience
- Enabling BTC deposits in the Iron Fish desktop wallet and other partnered wallets is key for a smooth user experience, as well as enabling scaleable co-marketing and partnerships.
- We’ll ship a TypeScript SDK and documentation focused on integrators. The SDK will make it easy to accept BTC in a wallet, and mint tBTC on Iron Fish.
- While we don’t propose to integrate the SDK into wallets ourselves, we’ll help promote it’s use among friendly wallets.
At the completion of Phase III, upon acceptance by the Foundation, Thesis earns $250k in USD.
Phase IV — Further harden the system
The fourth phase of development is about making the infrastructure even more robust. There will be two clear areas of improvement at this phase of development.
- A robust state relay
- The initial multisig state relay avoids centralized custody, but it still adds an unnecessary security burden on multisig participants and an unnecessary risk for end users.
- A stronger state relay is required for trust-minimized redemption from Iron Fish to other chains.
- The initial multisig should be replaced by either a proof-based relay (verifying Iron Fish’s PoW algo on other chains) or an optimistic multisig (based on tBTC’s “optimistic minting” construction, or the optimistic bridge pattern pioneered by Nomad).
- If the Iron Fish community settles on a PoW algorithm that can be verified on Ethereum, and we’re confident the PoW algo won’t be changing in the future, that will be preferred.
- Rotating minter authority
- The initial architecture of the system relies on a single FROST signing group to maintain minting authority for tBTC on Iron Fish.
- Our ideal system design spreads that authority across multiple, randomly sampled signing groups, each with a fixed minting limit.
- If the Iron Fish network successfully upgrades to support this limited, rotating pattern of authority, we’ll migrate to use multiple FROST signing groups.
- Otherwise, we’ll explore rekeying of signing group participants to allow for stakers exiting the Threshold network.
At the completion of Phase IV, upon acceptance by the Foundation, Thesis earns $250k in USD.
Plan to finish
It’s worth noting that for Thesis, we aren’t interested in doing this work without complete buy-in — the above phases are an entire proposal, rather than a menu.
Shipping only the first two phases of the project, for example, would mean a final product that is below our quality and value standards. As a result, we’ve structured these phases to deliver value incrementally, and we’d love feedback on all of the above — but we won’t be able to compromise on final quality or agree to ship substandard software.
Performance
We propose using performance milestones to align around more than just project delivery, but also ecosystem success.
Milestone I — 75k IRON earned at 10 tBTC minted on Iron Fish.
Milestone II — 75k IRON earned at 100 tBTC minted on Iron Fish.
Milestone III — 100k IRON earned at 250 tBTC minted on Iron Fish.
Milestone IV — 100k IRON earned at 500 tBTC minted on Iron Fish.
These milestones heavily incentivize a well-run launch and ongoing growth campaigns.
Summary
At today’s price of $0.81 / IRON, successful execution of this proposal will cost the Foundation $1,533,500.00. $1M is tied directly to milestone delivery, while $533k is in ecosystem-aligning incentives that are broadly advantageous. If tBTC on Iron Fish succeeds, we all benefit.
Stretch: Supporting other bridges
The system we’re proposing can be straightforwardly extended for more generic bridging of other fungible Ethereum ecosystem tokens (ERC-20s), either by our team, IF Labs, or another party. Decentralizing custody is often the trickiest part of building a robust bridge, and the first milestone we’ll have shipped.
I believe IF Labs is considering options for an ERC-20 bridge. We’d be happy to have that built atop the foundation we’re laying in phases I and 2 if a simple fee agreement can be reached to incentivize the stakers of the Threshold network.
Conclusion
The team and I are incredibly excited to work on something so aligned with our values. We appreciate the hard work and dedication of IF Labs and the Foundation so far, and we’re excited to work with the burgeoning community.
Looking forward to thoughts, questions, and feedback!
