Libre CrossLink Bridge

Sovereign Bitcoin Custody and Cross-Chain Orchestration via Threshold Cryptography

Overview

Libre CrossLink is a decentralized system that enables secure cross-chain transactions between Bitcoin and the Libre blockchain. It leverages Multi-Party Computation (MPC) and Threshold Signature Schemes (TSS) to provide a trustless and secure mechanism for cross-chain asset transfers and dedicated vault infrastructure.

The system serves two primary purposes:

1. Creating a trustless bridge for moving BTC value between Bitcoin and Libre blockchains

2. Providing institutional-grade, segregated vault custody for Bitcoin collateral in the Libre Lending ecosystem

For detailed technical specifications, see the Technical Whitepaper.

For comparisons with other Bitcoin bridge solutions like THORchain and Liquid, see Bridge Comparison.

Key Features

• True Decentralization: No custodians or intermediaries

• Institutional-Grade Security: MPC-TSS cryptography for secure key management

• Segregated Vaults: Individual Bitcoin addresses for each user's collateral

• Smart Contract Integration: Full programmability through Libre's WASM environment

• Dual Asset Models: Support for both unwrapped BTC (vaults) and wrapped BTC (Fast BTC)

Core Purposes

Libre CrossLink was designed with two distinct yet complementary purposes in mind:

1. Trustless Bitcoin-Libre Bridge

The primary purpose of Libre CrossLink is to create a fully decentralized bridge between the Bitcoin and Libre networks. This bridge enables:

• Bitcoin Scaling: By moving Bitcoin operations to the more scalable Libre blockchain, users can benefit from faster transactions and lower fees while maintaining a connection to the Bitcoin network.

• Programmable Bitcoin: Once bridged to Libre, Bitcoin becomes programmable through Libre's smart contract capabilities, unlocking use cases not possible on the Bitcoin blockchain alone.

• Trustless Operation: Unlike other bridge solutions that rely on centralized components or trusted custodians, Libre CrossLink operates in a completely trustless manner with no centralized elements.

2. MPC TSS Vault Solution for Libre Lending

The second purpose of Libre CrossLink is to provide a unique, secure vault infrastructure for the Libre Lending platform:

• Dedicated User Vaults: Each user of Libre Lending receives their own unique Bitcoin vault address, generated specifically for them by the CrossLink nodes.

• Segregated Storage: Users' Bitcoin collateral never combines with other users' funds, maintaining complete separation of assets at the blockchain level.

• Institutional-Grade Custody: The MPC TSS architecture provides institutional-grade security without institutional intermediaries, as custodial operations are performed by the decentralized network of CrossLink nodes.

• Direct Collateralization: Users can directly collateralize lending positions with Bitcoin held in their personal vaults, enabling Bitcoin-backed loans without surrendering custody to a centralized entity.

How It Works

CrossLink combines on-chain smart contracts with off-chain MPC nodes to create a secure and efficient bridge:

1. Smart Contract Coordination: Libre smart contracts serve as the canonical source of truth

2. Decentralized Node Network: A network of CrossLink validators oversee and approve transactions

3. Threshold Cryptography: Requires minimum consensus among nodes for transaction signing

4. Two-Way Bridge: Supports both peg-in (BTC to Libre) and peg-out (Libre to BTC) operations

For detailed transaction flows, see the following guides:

• Bitcoin to Libre Peg-in Process
• Libre to Bitcoin Peg-out Process

Running CrossLink Validator Nodes

Running a validator node for Libre CrossLink provides a crucial service to the network while offering significant economic incentives. Validators who operate both Libre blockchain and CrossLink bridge validators earn transaction fees in multiple currencies:

• BTC fees: Earned from validating and processing Bitcoin peg-in and peg-out transactions

• USDT fees: Earned from validating and processing stablecoin transfers via the bridge

Fee Structure and Economics

Validators earn fees proportional to their participation in transaction validation. The fee structure includes:

• 0.1% of transaction value for Bitcoin peg-in/peg-out operations (paid in BTC)

• Variable fee rates for stablecoin transfers (paid in USDT)

• Additional incentives for maintaining high uptime and reliability

This multi-currency fee model provides validators with portfolio diversification and multiple revenue streams, creating strong economic incentives to maintain the security and reliability of the CrossLink bridge.

For detailed validator setup instructions and technical requirements, please refer to the CrossLink Validator Guide.

Roadmap and Future Work

1. Enhanced Security Measures: Additional security layers and auditing.

2. Performance Optimizations: Improved transaction processing speed.

3. Extended Chain Support: Support for additional blockchain networks, with the Libre smart contract continuing to serve as the central coordinator.

4. Governance Integration: Decentralized governance for bridge parameters.

5. Advanced Analytics: Real-time monitoring and analytics dashboard.

6. Expanded Vault Capabilities: Additional features for vault management including automated liquidation protection and collateral optimization.

7. Multi-Asset Vaults: Support for additional cryptocurrencies as segregated vault collateral.

Conclusion

Libre CrossLink represents a significant advancement in cross-chain interoperability and decentralized asset custody by providing a trustless, decentralized bridge between Bitcoin and Libre blockchains, as well as an institutional-grade vault solution for Bitcoin collateral in the Libre Lending ecosystem. By leveraging threshold signature cryptography and smart contract technology, it enables secure cross-chain transactions and segregated asset custody without centralized intermediaries. This approach aligns with the fundamental principles of decentralization and trustlessness that underpin blockchain technology.

What distinguishes Libre CrossLink from other solutions is its dual-purpose design: it not only facilitates asset transfers between blockchains but also provides dedicated, segregated vault infrastructure for each user of the Libre Lending platform. Additionally, the innovative use of the Libre smart contract as the authoritative source of truth and coordination mechanism enhances security, transparency, and auditability while eliminating many of the vulnerabilities found in more complex distributed systems.

The architecture and implementation details presented in this overview demonstrate how Libre CrossLink addresses the challenges of both cross-chain interoperability and secure collateral management while maintaining high security standards. As the project evolves, it has the potential to become a vital component of the broader blockchain ecosystem, enabling not only the free flow of assets across different blockchain networks but also the secure use of Bitcoin as collateral for decentralized financial applications.