Two startups, Nubit and Nebra Labs, are collaborating to develop a solution to verify the total value locked (TVL) claims made by Bitcoin decentralized finance (defi) projects. TVL is an important metric in defi as it indicates a token's liquidity and helps investors assess a project's popularity and trustworthiness. However, assessing Bitcoin-based TVL is challenging due to the unconventional unspent transaction output (UTXO) model that allows projects to manipulate and inflate TVL numbers. Nubit and Nebra Labs have designed a tool that leverages zero-knowledge proofs (zk-proofs) and a Bitcoin-based smart contract framework to reliably confirm TVL and prevent fraudulent claims. Their proof-of-TVL system is currently being tested and will be incorporated into Nubit's upcoming product called Goldinals, a Bitcoin fungible token standard.



Other News from Today