Threshold Network Cuts Annual Costs by 65% Through DAO Restructuring
2min read Threshold Network has announced a significant restructuring of its decentralized autonomous organization (DAO) and a strategic reinvestment plan for its T token. This move is in line with Threshold Improvement Proposal (TIP) 103, which aims to optimize governance processes and enhance operational efficiency. The restructuring follows an evaluation of the responsibilities remaining within the dao after tLabs took over the development and growth of tBTC.
The restructuring, formalized through TIP-100, builds on the framework introduced in TIP-98. It focuses on long-term sustainability and more targeted implementation strategies. A key change involves the reduction of DAO-assigned roles, with many responsibilities transitioned to a dedicated team at tLabs. This includes the handover of tBTC development, marketing, and integrations to tLabs, enabling more focused advancement of the protocol and better alignment with current market demands.
The restructuring also includes the formation of a new Threshold Committee, consisting of six part-time paid members and three volunteer seats. This committee takes over the responsibilities of the former Treasury Guild and Council, maintaining a 5-of-9 multisig security threshold. Additionally, five essential part-time contributor roles remain, covering treasury operations, tech support, communications, project management, and incentive reporting, all with optimized time commitments and hourly rates.
This restructuring has improved the protocol’s financial standing by reducing annual operational costs by approximately $1.1 million, bringing the total cost of governance and contributor roles to $602,000 per year. Combined with the expected annual savings of over $8.5 million from the elimination of tBTC staking rewards, this positions the protocol for significant profitability moving forward. The cost efficiency also allows the DAO to eliminate treasury sales of T tokens, enabling strategic reinvestment in T tokens. The DAO treasury will continue to accrue tBTC via bridge fees and T tokens via buybacks as per TIP-54. Threshold has already completed its first purchase of approximately 30 million T tokens for 5.8 tBTC.
The economic linkage between T and tBTC is expected to create a virtuous cycle of growth. Increased Total Value Locked (TVL) and bridge velocity are anticipated to drive T’s value, attracting further participation and reinforcing the ecosystem’s expansion. With approximately 420 million T tokens available in governance and multisigs, worth around $7 million in today’s market value, and $8-9 million in reserve assets (tBTC, ETH, and stablecoins), the project is well-positioned to support tLabs’ development efforts without requiring additional token issuance.
Threshold Network powers tBTC, a trust-minimized way to bring BTC liquidity into the crypto ecosystem while maintaining a direct settlement path back to native Bitcoin. Since its launch, Threshold tBTC has processed 32,000 BTC ($2.7 billion at current prices), cementing its position as a flagship platform driving innovation and growth. Unlike other BTC derivatives or wrapped tokens, tBTC is designed to be as close to Bitcoin as possible while enabling seamless participation in DeFi. No complex staking mechanics or dependency on a single entity—just pure BTC liquidity that always settles back to Bitcoin. The T token powers tBTC and is the value accrual asset used to distribute profits from bridge fees via token buybacks.
