Function

Function is a decentralised protocol that issues a wrapped Bitcoin token (FBTC) with omnichain interoperability. It allows Bitcoin holders to access decentralised finance (DeFi) services across multiple chains, including EVM-compatible and non-EVM Layer 1 and Layer 2 networks. The protocol employs a Threshold Signature Scheme (TSS) to coordinate secure minting and burning operations through a network of independent MPC (multi-party computation) nodes. Custodial Bitcoin is held under strict key-share governance, and minting of FBTC is tied to KYC/KYB-approved participants known as qualified users. Function's infrastructure integrates smart contracts, custodial mechanisms, and off-chain modules to maintain 1:1 collateralisation of FBTC with native Bitcoin, while enabling transferability, programmability, and access to decentralised yield opportunities. It includes a bridge layer, smart contracts on destination chains, monitoring tools, and TSS nodes with risk control logic.

The system allows minting of both free-floating FBTC tokens (FBTC0) and locked variants (FBTC1), which are tailored for use in third-party DeFi strategies. These locked tokens are minted and burned through coordinated cross-chain interactions, ensuring integrity of the Bitcoin principal across partner vaults.

FBTC is a tokenised representation of Bitcoin issued through Function. It maintains a 1:1 peg with BTC and is minted upon deposit of native Bitcoin to MPC-managed addresses. FBTC is deployed as a wrapped token on multiple destination chains, primarily using ERC-20 standards on Ethereum and compatible environments.

FBTC tokens are:

• Backed by native Bitcoin held in custodial addresses governed by decentralised MPC infrastructure
• Minted and burned through qualified user flows under strict compliance rules
• Integrated into Turing-complete smart contract environments for composability with DeFi protocols

The protocol distinguishes between standard FBTC (FBTC0), which is transferable and used across general DeFi systems, and locked FBTC (FBTC1), which is used within partner strategies and not freely tradable.

• Representing BTC on smart contract-compatible blockchains
• Accessing decentralised yield strategies through partner vaults
• Enabling BTC liquidity on Layer 1s and Layer 2s beyond the Bitcoin main chain
• Facilitating programmable financial operations and composable DeFi workflows
• Supporting cross-chain asset movement and collateral applications

The protocol supports mint, burn, and transfer operations, including cross-chain transfers of FBTC initiated by users across supported networks. FBTC is also used in integrations with third-party protocols for arbitrage, lending, and staking functions.