Interlay launches Bitcoin-backed stablecoin iBTC on the Polkadot network
Interlay has launched a wrapped Bitcoin asset called interBitcoin (iBTC) on the Polkadot chain. The product intends to expand BTC usage “for DeFi, cross-chain transfers, NFTs and more.”
iBTC is already Acala and Moonbeam compatible. But developers have lined up $1 million in funding to expand the project to other chains. Plans are in place to launch on Ethereum, Cosmos, Solana and Avalanche soon.
“iBTC is a Bitcoin-backed stablecoin, maintained by a decentralized network of security-coated vaults and redeemable 1:1 for BTC.”
How does iBTC work?
Interlay’s mission is to realize “the true nature of BTC” by expanding its use to any blockchain.
“interBTC realizes the true free nature of BTC and decentralized finance. A 1:1 Bitcoin backed asset, complete security, interoperable and censorship resistant.”
The background for this is a network of decentralized vaults, which the company has stated is open to anyone to run and operate their own vault. Users lock their Bitcoin security with a vault, which then creates and issues iBTC to the user.
Interplay said iBTC is 1:1 backed and can be redeemed with Bitcoin. Also, the locked BTC is insured and refunded in case of vault failure.
Interlay’s co-founder and CEO Dr. Alexei Zamyatin said iBTC brings Bitcoin’s trust and security to more technologically innovative chains. In fact, it combines the best of both worlds while protecting Bitcoin’s trustless nature.
“Bitcoin is the driving force behind global crypto adoption, while Polkadot, Ethereum & co. is where tech innovation happens.”
The project said that iBTC is different from other cross-chain bridges in that users only need to trust Bitcoin and Polkadot. Also, “there is no single point of failure” and there is an automatic refund process for lost BTC from the security insurance.
Transverse chain bridges under fire
Several high-profile hacks, including the Nomad hack, which was siphoned for $190 million, and the Ronin hack, where attackers netted $615 million, have put cross-chain bridges firmly in the spotlight.
A recent report from data analytics platform Chainalysis estimated that $2 billion was lost to cross-chain bridge hacks so far this year. Moreover, this type of cybercrime now accounts for 69% of all stolen crypto funds.
Chain Analytics researchers said the problem has become so widespread that it now poses “a significant threat” to public trust in blockchain technology.
To combat the problem, Chainalysis called for stricter code audits and the use of established smart contract code to serve as a template for new projects.
