Bifrost Continues Bitcoin-Cardano Bridge Development After Treasury Vote Fails

Bifrost remains under active development after a Treasury withdrawal request for ₳12,332,031 failed to pass Cardano governance. The action expired on August 2 with 33.77% DRep support, below the required 67% threshold. FluidTokens has since confirmed that testnet work and existing Project Catalyst commitments are proceeding.

Bifrost Moves Forward After Failed Treasury Vote

Bifrost is a trust-minimized bridge being developed by FluidTokens and Lantr to connect Bitcoin liquidity with Cardano applications. Its design allows Bitcoin to be locked on the Bitcoin network and represented as a Cardano native asset for use across compatible applications.

The failed Treasury proposal was intended to finance a nine-month Phase 1 covering bridge hardening, independent security audits, formal verification, penetration testing and preparation for a controlled mainnet deployment.

Intersect recorded the action as expired with 33.77% DRep support against the required 67%. The Constitutional Committee registered six Yes votes, no No votes and one Abstain, but the DRep threshold was not reached and no Treasury funds were released.

After the vote, FluidTokens said the project would remain active while the team collected feedback from SPOs, DReps and the wider Cardano community. As of August 17, no replacement Treasury withdrawal action or revised funding request has been submitted.

Bitcoin-to-Cardano Bridge Remains Active on Testnet

Bifrost separately received ₳739,000 through Project Catalyst Fund 14 for development of the Bitcoin-Cardano bridge. Three of six milestones have been completed, with approximately ₳563,560 distributed and ₳175,440 remaining.

The current environment connects Bitcoin Testnet4 with Cardano Preprod.

Permissionless Watchtowers monitor confirmed Bitcoin state and provide proofs for validation on Cardano. Cardano stake pool operators are designed to participate in a stake-weighted threshold-signature model used to authorize Bitcoin withdrawals.

The test flow allows Bitcoin to be deposited and represented on Cardano as a native asset, including the fBTC and newer fSAT denominations, before being redeemed back toward Bitcoin.

Bifrost remains testnet infrastructure and does not currently custody real mainnet Bitcoin.

Development has also changed part of the bridge’s cryptographic architecture. Bitcoin transaction inclusion proofs moved from the original zero-knowledge approach to more efficient Merkle inclusion and exclusion proofs, while zero-knowledge components remain in parts of the system designed to prove malicious SPO behavior.

Mainnet Transition Needs a New Funding Route

The expired Treasury proposal was designed to finance the work required to move Bifrost beyond its functional test environment.

Phase 1 included external audits, formal verification, additional bridge hardening and a controlled private mainnet deployment before a later public rollout.

The remaining Catalyst grant supports the existing development milestones, but it does not cover the full security and deployment program contained in the ₳12.33 million Treasury request.

Bifrost has no dedicated bridge token financing its development. Its proposed longer-term model instead relies on bridge fees to support operations, with an indicative structure that could distribute surplus fees between participating SPOs and the Cardano Treasury. That model was part of the expired proposal and has not been approved on-chain.

The Catalyst-funded testnet work can still be completed, but the security audits, formal verification and production deployment required to secure real Bitcoin no longer have the Treasury funding proposed for Phase 1.