tzBTC - native Tezos wrap for Bitcoin

definition and advantages tzbtc is a tezos wrap for bitcoin assets it allows users and applications on tezos to directly transact in btc on the tezos blockchain, bringing btc’s liquidity and brand to the tezos ecosystem and enabling novel financial use cases on chain one tzbtc represents one btc (so tzbtc is bitcoin on tezos) , the parity that a group of keyholders and an independent third party auditor ensures in short, the value of tzbtc aims to represent the value of btc liquidity gateway tzbtc brings the liquidity and battle tested brand of bitcoin (btc) into the tezos ecosystem, enabling btc backed use cases on tezos developers on tezos can use tzbtc to implement novel financial applications on the tezos blockchain compatible with smart contracts and dapps as an asset on tezos, tzbtc enables tezos based applications to use btc with the full expressivity of tezos smart contracts tzbtc is implemented using the fa 1 2 asset standard https //assets tqtezos com/docs/intro/ on tezos failure proofed the tzbtc system divides governance among a group of keyholders keyholders can access via multi signature wallets the underlying bitcoin and oversee supply management by minting and burning the corresponding tzbtc gatekeepers interact directly with end users and ensure compliance with kyc & aml documentation key players in the ecosystem the association is an independent third party that monitors the tzbtc issuance process and publishes quarterly audit reports to confirm that the amount of btc in custody by keyholders equals the amount of tzbtc in circulation the association supervises keyholder meetings to manage the supply of tzbtc (mint and burn) and to determine the fees for conducting such actions the association also mediates any dispute arising concerning the interpretation, performance, or termination of the keyholder agreement before engaging a conflict in court keyholders are responsible for the custody of btc, the minting of the corresponding tzbtc, and the burning of tzbtc when btc is redeemed as the custodians of the btc corresponding to the tzbtc in circulation, keyholders may have legal and regulatory requirements that may differ between countries keyholders securely custody btc using a multi signature (“multi sig”) setup a multi sig setup is also implemented for the minting and burning of tzbtc gatekeepers act as financial intermediaries and often serve business to consumer (“b2c”) markets, which requires them to be compliant with know your customer (kyc), anti money laundering (aml), and other regulations gatekeepers may accept btc and allocate the corresponding tzbtc (minted by keyholders) for users after performing identity verification checks gatekeepers have individual bilateral contracts with keyholders, and a template for such a contract is available here users buy, sell, and hold tzbtc tzbtc is acquired from gatekeepers when users and gatekeepers enter into agreements users can freely transact tzbtc via fa1 2 supported wallets, and transactions may be publicly viewed via fa1 2 supported block explorers a list of supported wallets and block explorers is available at https //tzbtc io https //tzbtc io how tzbtc functions three processes are involved in the tzbtc system initiating, minting and burning initiating refers to the process whereby a user requests to acquire tzbtc from a gatekeeper following a successful identity verification check performed by a gatekeeper, that gatekeeper will accept a user’s payment (typically in btc) and issue a new tzbtc to its designated address (after minting) minting refers to the process of creating a new tzbtc, which corresponds to the btc held in custody minting cannot be executed by a single keyholder (requires multiple keyholder signatures) and happens in response to demand from gatekeepers in addition to a regular (quarterly) minting process, a user may pay a higher fee to execute an ad hoc minting process minting new tzbtc increases the amount of tzbtc in circulation burning refers to the process of redeeming tzbtc for btc only gatekeepers may initiate the process of burning tzbtc by doing so, the amount in question is deducted from a gatekeeper’s tzbtc balance, and the corresponding btc is returned to a user burning tzbtc decreases the amount of tzbtc in circulation