tBTC Bridge Partly Resumes, but Aave's $120M Reserve Stays Frozen

The tBTC bridge that carries bitcoin onto Ethereum is running again after a nine-day pause. Aave, though, still keeps a reserve of roughly $120 million in the token frozen. For anyone holding tBTC in lending positions, those two facts mean very different things.

What happened to the tBTC bridge?

Threshold Network halted the bridge on Oct. 30. The cause was a critical vulnerability in the Linux kernel that let a remote attacker run code on unpatched servers. The node operators who keep the bridge alive had to install fixes.

On Sunday Threshold said the network was restarting as patched nodes reconnected. Requests submitted before the halt will be processed once enough operators are back. New deposits, minting and redemptions remain closed for now. The project gave no date for full recovery. According to Threshold, there is no evidence the flaw was used against tBTC nodes.

How does tBTC work, and why do nodes matter so much?

To see why the pause hit Aave, it helps to recall the mechanics. tBTC is bitcoin wrapped for Ethereum. You hand over BTC and receive a token you can put into DeFi (decentralized finance protocols). The bitcoin is held not by one company but by a group of independent operators who jointly sign any movement of funds.

• Deposit: bitcoin goes to a wallet controlled by the operators, and tBTC is minted in return.
• Redemption runs the other way: the token is burned and operators send BTC back.
• Signing needs enough nodes online, otherwise operations stall.
• A critical hole on one operator's server threatens the whole scheme, so the pause was precautionary.

While part of the nodes remain unpatched, there is no quorum for signatures. That is why new operations are still unavailable.

Why did Aave freeze the reserve?

Aave shut the tBTC reserve on Ethereum Core on Oct. 31. The logic is clear: if a token cannot be exchanged back into bitcoin, its real value gets less certain and loans against it get riskier. So new tBTC deposits are blocked, and the token no longer adds borrowing power.

Existing users can still withdraw their assets and repay loans. Only the growth of positions is frozen. It is a cautious mode, not a liquidation.

Are there signs of losses?

Threshold says it found no unauthorized bitcoin transfers or token minting. Bridge wallets hold about 4,320 BTC against roughly 4,185 tBTC in circulation, a cushion of about 3%. Still, those are the project's own numbers, not an independent check.

Without that cushion the freeze would be longer and harsher. So far both sides are acting on caution.

What comes next?

LlamaRisk, Aave's risk provider, said it will propose restoring the reserve once the bridge returns to normal. A vote will decide, not automation, so a quick thaw is unlikely.

The practical lesson is simple. A wrapped token carries bridge risk on top of the risk of Bitcoin itself, and it shows up exactly when you need to exit. If you use such an asset as collateral on Ethereum, check who signs redemptions and what happens if those people are temporarily offline.