Based on my research, here's a comprehensive overview of Function FBTC (FBTC):
What is Function FBTC?
Function FBTC is a decentralized, omnichain Bitcoin-backed cryptocurrency that transforms idle Bitcoin into a productive, yield-generating asset across multiple blockchains. Previously known as "Ignition," the project rebranded to Function in February 2025.
The Core Problem It Solves
While Bitcoin has a market cap of ~$1.3 trillion, only about 4% participates in DeFi, compared to Ethereum's 75%. Function FBTC bridges this gap by enabling Bitcoin holders to earn yield and access DeFi opportunities without selling their BTC.
Key Features
๐ 1:1 Bitcoin Peg
- Each FBTC token is fully backed by real Bitcoin held in custody
- Verified through Chainlink's Proof of Reserves system
- Currently holds 13,500+ BTC in reserves (~$1.31 billion)
๐ Multi-Chain Support
FBTC operates across 8+ blockchains:
- Ethereum
- Mantle Network
- BNB Smart Chain
- Arbitrum One
- Base
- Solana
- BOB Network
- Plume Network
๐ฐ Yield Generation
- Earn 1.5% to 7.5% APY through DeFi yield strategies
- Two token forms: FBTC0 (standard) and FBTC1 (yield-optimized)
- Integrated with 30+ DeFi protocols
Current Market Stats (Feb 2026)
| Metric | Value |
|---|---|
| Price | $67,289 (tracks Bitcoin 1:1) |
| Market Cap | $750 million |
| Rank | #77 |
| Total Value Locked | $1.3+ billion |
| Circulating Supply | 11,150 FBTC |
| 24h Volume | $94,073 |
Recent Performance:
- 24h: -2.76%
- 7 days: -11.42%
- Tracks Bitcoin's price movements closely
How It Works
Minting Process:
- Users deposit native BTC to custodial addresses
- Bridge Monitor detects the deposit
- TSS (Threshold Signature Scheme) nodes validate using Multi-Party Computation
- FBTC tokens are minted on your chosen blockchain
Burning Process:
- Initiate burn request through the Bridge contract
- FBTC tokens are burned
- Equivalent BTC is returned to your wallet
Security Architecture:
- Multi-Party Computation (MPC) for distributed custody
- Threshold Signature Schemes (TSS) for transaction validation
- Multi-signature governance with institutional partners
- Chainlink Proof of Reserves for transparency
Risk Assessment
| Risk Factor | Score | Notes |
|---|---|---|
| Risk Score | 66.29/100 | Moderate-high risk |
| Liquidity | 14.38/100 | Low liquidity - caution on large trades |
| Volatility | 4.28/100 | Very low (tracks Bitcoin) |
Key Risks:
- Low trading liquidity may impact large orders
- Custodial risk (though mitigated by MPC)
- Smart contract vulnerabilities
- Regulatory uncertainty for cross-chain assets
Key Partners & Backers
Core Contributors:
- Mantle Network - Infrastructure partner
- Antalpha Prime - Strategic investor
- Cobo - MPC custody technology
DeFi Integrations:
- Chainlink (Proof of Reserves)
- PumpBTC, Bedrock, Minterest
- Cian, Sentora, Kamino (yield vaults)
Use Cases
- Earn Yield on Bitcoin - Generate passive income without selling BTC
- DeFi Access - Use Bitcoin in lending, staking, and liquidity pools
- Cross-Chain Transfers - Move Bitcoin seamlessly between blockchains
- Collateral - Use FBTC as collateral in DeFi protocols
- Institutional Strategies - Structured yield products for asset managers
Function FBTC vs. Competitors
vs. Wrapped Bitcoin (WBTC):
- FBTC: Multi-chain, MPC security, yield-focused
- WBTC: Ethereum-only, centralized wrapping
vs. sBTC:
- FBTC: Institutional-grade infrastructure, broader chain support
- sBTC: Bitcoin layer-based via Stacks blockchain
โ ๏ธ Important Note: Two Different "FBTC" Assets
Don't confuse these:
- Function FBTC (Cryptocurrency) - The DeFi protocol described above
- Fidelity FBTC (ETF) - Fidelity's Bitcoin ETF traded on stock exchanges with $14-17B AUM
They share the same ticker but are completely different products!
Bottom Line
Function FBTC is designed for Bitcoin holders who want to:
- Keep exposure to Bitcoin's price
- Earn yield through DeFi strategies
- Access multi-chain opportunities
- Maintain institutional-grade security
However, the low liquidity score and moderate-high risk rating mean it's better suited for experienced crypto users who understand DeFi risks. The recent 11.42% weekly decline mirrors Bitcoin's broader market movements.
Official Resources:
- Website: https://www.fxn.xyz/
- Twitter: https://twitter.com/FunctionBTC
- Documentation: https://docs.fbtc.com/