Interlay, a London-based blockchain company, has launched a Bitcoin-based cross-chain bridge on the Polkadot ecosystem.
Dubbed interBTC (iBTC), the bridge allows the circulation of Bitcoin usage across multiple blockchains. Users can easily exchange coins/tokens and NFTs between networks.
InterBTC operates as a BTC-backed stablecoin, secured by a decentralized network of overcollateralized vaults, which according to Interlay, resembles MakerDAO’s DAI token.
iBTC vaults use “overcollateralized” assets to secure BTC reserves, from which it is possible to exchange 1:1 between iBTC and BTC via the Bitcoin blockchain. As a precaution, the collateral is programmed to repay the sender of BTC.
Over-collateralized here means that the stablecoin will be backed by several crypto assets that are worth more than the total of the stablecoin minted. DAI is the most typical example of this stablecoin.
Sharing the thought process behind the initiative, Interlay co-founder and CEO Alexei Zamyatin stated:
“Bitcoin is the driving force behind global crypto adoption, while Polkadot, Ethereum & co. is where technological innovation is happening. With interBTC, we combine the best of both worlds while preserving the trustless nature of Bitcoin.”
Interlay’s announcement also highlights the vision of Ethereum co-founder Vitalik Buterin and Polkadot inventor Gavin Wood to create a fully decentralized Bitcoin bridge on Polkadot. Acala and Moonbeam will be the first DeFi hubs to launch iBTC.
This program will be supported by a $1 million liquidity package provided by Interlay treasury and partner projects. The iBTC integration roadmap also includes other major DeFi networks such as Ethereum, Cosmos, Solana, and Avalanche.
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