The Importance of Trustless Custody: Starting from the Unibtc Freezing Incident

In April 2025, a netizen sought help on social media, stating that over $100,000 worth of unibtc assets were trapped and could not be withdrawn while performing arbitrage operations on a certain Bitcoin Layer 2 chain.

According to the involved party W, he discovered that the unibtc issued by a certain project on that chain exhibited price anomalies and decoupled from BTC, believing it to be a great arbitrage opportunity. He transferred some BTC to that chain, exchanged it for unibtc, and waited to sell after it was re-pegged.

The unibtc had already been pegged back within 24 hours, but when W tried to sell it, they found that the unibtc-BTC liquidity pool on the chain had been removed by the project party. This was the only secondary market exit channel for unibtc on the chain. Unable to sell the unibtc in hand, W attempted to bridge the unibtc to other chains.

However, when he found the only cross-chain bridge that supports unibtc on the chain, he received a prompt stating "Transaction requires project party signature authorization." The customer service of the cross-chain bridge explained that the multi-signature key for unibtc cross-chain is managed by the project party, and users cannot transfer unibtc to other chains without permission.

W can only contact the project party for inquiries. The other party initially replied that it is possible to withdraw the principal, but the profits generated from arbitrage need to be reviewed. W realizes that the unibtc worth about $200,000 in his hands has been "temporarily frozen", making it impossible to sell on that chain or to transfer to other chains.

The attitude of the project party has become vague and unclear, neither explicitly stating when the principal can be withdrawn nor providing any written commitment, delaying for various reasons. Later, the project party claimed that the decoupling of unibtc was due to someone on a certain platform borrowing unibtc assets on a large scale and dumping them, suggesting that W "hold that platform accountable".

After more than two weeks of negotiations, W finally received a positive response from the relevant parties and successfully recovered the assets. However, this is not an isolated incident; a similar event occurred last year, resulting in users' unibtc being "substantially frozen".

From a technical perspective, as the issuer of unibtc and the initial LP of the secondary market liquidity pool, the project party naturally possesses the authority over the exit channels of unibtc in the secondary market. To restrict their power, it requires more governance rather than technical means.

However, the collusion between the cross-chain bridge and the project party to refuse user requests exposes the obvious technical flaws in unibtc during the "issuance - single-chain circulation - multi-chain circulation" stages: the cross-chain bridge, as a partner of the project party, is clearly highly centralized.

A truly trustless bridge should ensure that the bridge officials cannot block users from exiting. However, in this case, both the project party and the cross-chain bridge possess strong centralized authority and have not provided a censorship-resistant exit channel.

Similar cases are not uncommon, as major exchanges and other project parties have experienced incidents of cutting off user exit paths. These cases fully demonstrate that if asset custody platforms cannot provide trustless services, it will inevitably lead to adverse consequences.

However, achieving trustlessness is no easy task. From payment channels and DLCs to BitVM and ZK Rollups, people have tried various methods, which can greatly ensure user autonomy and provide reliable asset withdrawal options, but there are still unavoidable flaws.

Currently, there is no perfect asset accomplice and exit plan in the market, and continuous innovation is still needed. A research team has proposed a trustless message verification scheme that combines TEE, ZK, and MPC, achieving a balance in terms of cost, security, and user experience, which can provide reliable underlying services for trading platforms, cross-chain bridges, or any asset custody scenarios.

The plan adopts an asset pledge access form, selects verification nodes through a random lottery algorithm, and combines ZK to hide the identity of those selected. The core code of all nodes runs in a TEE hardware environment, further preventing collusion. This design significantly increases the difficulty of attacks and provides a higher decentralized guarantee for asset custody.

In practical applications, this solution can be combined with smart contracts to achieve self-custody of assets such as Bitcoin. By using mechanisms like multi-signature and time locks, it protects user rights while restricting malicious behavior, striking a balance between the interests of all parties. This provides a possible technical path for addressing similar events like the unibtc freezing incident.

In summary, with the development of blockchain technology, trustless custody solutions will play an increasingly important role in protecting user assets and enhancing system security. In the future, we can expect to see more innovative solutions emerging to provide more reliable and secure asset management services for the blockchain ecosystem.