Threshold's tBTC bridge has resumed onchain operations, but Aave's Ethereum Core market holds $119.9 million in tBTC reserves that remain frozen while Threshold waits for more operators to reconnect. The frontend application is still paused.
Borrowers who deposited tBTC as collateral in Aave's Ethereum Core pool cannot withdraw or rebalance, and lenders who supplied assets against tBTC collateral are locked into positions. The onchain restart allows new mints and burns at the contract level, but without the frontend and full operator consensus, users cannot access the frozen reserves. Aave governance has no direct mechanism to force a withdrawal and depends entirely on Threshold's timeline.
The freeze ties up capital and creates opportunity cost for Aave users, though tBTC collateral remains recognized onchain with no apparent liquidation risk or bad debt. The gap between "onchain live" and "users can exit" introduces tail risk that extends with each day the pause continues.
Source: The Defiant