Blockchain startup Interlay, headquartered in London, has released a Bitcoin-based cross-chain bridge using the Polkadot platform.
This bridge, which has been given the name interBTC (iBTC), enables the circulation of Bitcoin use between several blockchains. Users on different networks are able to effortlessly trade coins/tokens and NFTs with one another.
According to Interlay, the cryptocurrency InterBTC functions as a BTC-backed stablecoin and is protected through a decentralized network of overcollateralized vaults. InterBTC is said to be similar to MakerDAO’s DAI token.
iBTC vaults make use of assets that are “overcollateralized” in order to safeguard BTC reserves. The Bitcoin blockchain makes it possible to trade an equal amount of iBTC and BTC from these reserves. The collateral is set up to automatically reimburse the person who sent the Bitcoins as a safety measure.
When we talk about a stablecoin being over-collateralized, we mean that it will be backed by a number of crypto assets that have a combined value that is more than the entire value of the stablecoin that will be issued. The most prevalent illustration of this kind of stablecoin is DAI.
Alexei Zamyatin, co-founder and CEO of Interlay, provided some insight into the thinking that went into the effort by stating:
“Bitcoin is the driving force behind the adoption of cryptocurrencies on a worldwide scale, while Polkadot, Ethereum, and other cryptocurrencies are where technical innovation is taking place. InterBitcoin brings together the advantages of both worlds while maintaining the decentralized and trustless character of Bitcoin.
The revelation made by Interlay brings attention to the plan that Ethereum co-founder Vitalik Buterin and Polkadot creator Gavin Wood have to build a completely decentralized Bitcoin bridge using Polkadot. It has been decided that the first DeFi hubs to deploy iBTC will be Acala and Moonbeam.
This initiative will be funded by a liquidity package of $1 million that will be given by Interlay treasury and partner projects. Other major DeFi networks including Ethereum, Cosmos, Solana, and Avalanche are included in the iBTC integration plan as well.
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