Custodial Addresses

Custodial addresses are a critical component of the FBTC project, used to manage the secure deposit and withdrawal of BTC assets. These addresses ensure that user funds are safely stored and accurately reflected in the FBTC system.

Functionality

Deposit Addresses

Assignment of Deposit Addresses Each qualified user is assigned a unique BTC deposit address. When a user deposits BTC into this address, it triggers the minting process, converting the deposited BTC into an equivalent amount of FBTC.

Deposit Verification The system continuously monitors the blockchain for incoming transactions to these deposit addresses. Upon detecting a deposit, the system verifies the transaction details and updates the user's FBTC balance accordingly.

Security Measures Deposit addresses are managed using Multi-Party Computation (MPC) and Multi-Signature (Multi-Sig) techniques to ensure that no single entity has complete control over the assets. This decentralized approach significantly enhances the security of user funds.

Withdrawal Addresses

Assignment of Withdrawal Addresses Each qualified user is also assigned a unique BTC withdrawal address. When a user initiates a burn request to convert FBTC back to BTC, the system sends the corresponding BTC amount to this withdrawal address.

Withdrawal Verification The system verifies the burn request details and ensures that the correct amount of BTC is sent to the user's withdrawal address. This process involves multi-signature validation to maintain security and accuracy.

Security Measures Similar to deposit addresses, withdrawal addresses are also managed using MPC and Multi-Sig techniques to protect against unauthorized access and ensure the safety of user assets.