The London-based blockchain firm Interlay launched a Bitcoin (BTC)-based cross-chain bridge on Polkadot (DOT). Their new product, called Inter BTC, operates as a BTC-backed stablecoin secured by overcollateralized vaults. This model is similar to the MakerDAO’s DAI token according to Interlay.
The bridge, called interBTC (iBTC), allows Bitcoin to be used on non-native blockchains for decentralized finance (DeFi), cross-chain transfers, and nonfungible tokens (NFTs). According to Interlay, the overcollateralized vaults that secure iBTC resemble MakerDAO’s DAI stablecoin.
The iBTC vaults draw upon mixed-asset collateral to protect BTC reserves. This makes it possible to 1:1 redeemBTC with BTC over the Bitcoin blockchain. Should a vault fail and prevent access to assets, the programmed collateral will be automatically reduced proportionately as determined by the deposit amount so that all BTC depositors are reimbursed.
Interlay’s announcement also included a passage from Ethereum co-founder and Polkadot inventor Gavin Wood’s goal of building a fully decentralized Bitcoin bridge on Polkadot, which was made possible by interBTC. The debut of iBTC will be hosted by Acala and Moonbeam, which will be complemented by a $1 million liquidity program provided by the Interlay network treasury and partner projects.
iBTC will be accessible on a number of key DeFi networks, including Ethereum, Cosmos, Solana, and Avalanche. 1inch Network, a DeFi aggregator that echoes Interlay’s desire to serve the DeFi and other crypto markets, is interested in geographic growth in new jurisdictions.
Sergej Kunz, the co-founder of DeFi aggregator 1inch Network, told Cointelegraph that the company wants to increase its presence in Asia. The primary purpose of 1inch Network as a decentralized exchange (DEX) aggregator is to identify pools with the most liquidity, lowest slippage, and cheapest cryptocurrency exchange rates.