Interlay, a London-based blockchain firm, launched a Bitcoin (BTC)-based cross-chain bridge on Polkadot (DOT). Named interBTC (iBTC), the bridge allows the use of Bitcoin on non-native blockchains for decentralized finance (DeFi), cross-chain transfers and nonfungible tokens (NFTs), among others.
interBTC operates as a BTC-backed stablecoin, secured by a decentralized network of overcollateralized vaults, which according to Interlay, resembles MakerDAO’s DAI token, a stablecoin on the Ethereum blockchain.
The iBTC vaults use mixed-asset collateral to insure BTC reserves, making iBTC redeemable 1:1 with BTC over the Bitcoin blockchain. As a preventive measure during unforeseen vault failure, the collateral is programmed to get slashed and reimburse the BTC depositors. Sharing the thought process behind the initiative, Interlay co-founder and CEO Alexei Zamyatin stated:
Interlay's announcement also highlighted Ethereum co-founder and Polkadot inventor Gavin Wood’s vision of creating a fully decentralized Bitcoin bridge on Polkadot, which was made possible by interBTC. Acala and Moonbeam will be the first DeFi hubs to host iBTC’s debut, which will be supported by a $1 million liquidity program offered by the Interlay network treasury and partner projects.
The roadmap for iBTC involves being available on other major DeFi networks, including Ethereum, Cosmos, Solana, and Avalanche.
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