The post Bitcoin Trust in Crisis: Nubit Founder Exposes Fake Lockups in the BTCFi Ecosystem appeared on BitcoinEthereumNews.com.

COINOTAG reported on January 4th that the founder of Nubit has raised significant concerns regarding the BTCFi ecosystem, specifically highlighting the troubling practice of fake lockups facilitated by offline pre-signed transactions. These transactions create a deceptive appearance of locked Bitcoin, without the actual funds being secured on the mainnet. According to the founder, users can erroneously submit various pre-signed transactions leveraging the same UTXO, leading to inflated Total Value Locked (TVL) metrics across multiple protocols, which undermines genuine trust within the ecosystem. To address these critical issues, he proposed two actionable solutions. First, implementing truly on-chain transactions by utilizing Bitcoin script addresses for locking funds. Second, adopting zero-knowledge proof designs can enhance transparency in lockups, effectively mitigating potential double-spend risks. He stressed that without a robust guarantee from the Bitcoin mainnet, this ongoing issue will persist, as BTC remains the bedrock of trust in cryptocurrency, necessitating that TVL reflects authentic value rather than mere illusions. Source: https://en.coinotag.com/breakingnews/bitcoin-trust-in-crisis-nubit-founder-exposes-fake-lockups-in-the-btcfi-ecosystem/

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Filed under: News - @ January 4, 2025 4:12 am