Infrastructure Risk

hBTC relies on multiple underlying blockchain and protocol infrastructures, including Bitcoin, Stacks, Clarity-based smart contracts, and the sBTC decentralized bridge. The proper functioning of these systems is critical to protocol operation.

Key infrastructure risks include:

• Blockchain liveness and availability: Disruptions to Bitcoin or Stacks block production, finality, or network availability could delay deposits, withdrawals, reward processing, or other protocol operations.

• Network congestion: Periods of elevated transaction volume on Bitcoin or Stacks may result in increased confirmation times and higher transaction costs, affecting settlement timelines and user experience.

• Consensus failures: Failures or instability in underlying consensus mechanisms (e.g., Bitcoin consensus or Stacks’ Proof-of-Transfer) could impact transaction ordering, finality, or contract execution.

• Bridge and cross-chain infrastructure risk: hBTC depends on the sBTC decentralized bridge to move Bitcoin between Bitcoin L1 and Stacks. Failures, delays, or security incidents affecting the bridge or its signer network could impair minting, redemption, or asset availability.

While these infrastructures are designed for robustness and decentralization, they are external dependencies and may experience outages, performance degradation, or unforeseen failure modes beyond the control of the hBTC protocol.