In a step towards creating a truly interoperable blockchain ecosystem, cross-chain bridge service provide Interlay has joined hands with Polkadot to bring the platform’s first trustless wrapped Bitcoin PolkaBTC by early 2021.
PlkaBTC is nothing but an official bridge between Bitcoin and Polkadot blockchains. The entire project is entirely funded by Polkadot’s parent Web 3 Foundation.
Reportedly, Interlay has successfully completed the pilot project and further plans to complete the BTC Parachain by Q1 2021. After successful deployment, users can mint 1:1 Bitcoin-backed assets on the Polkadot blockchain as PolkaBTC. This is a milestone achievement in extending the usability of Bitcoin.
The PolkaBTC will be used for a wide range of applications such as lending protocols, stablecoins, and decentralized exchanges (DEXs). Besides, it can also be used as a native asset on the Polkadot blockchain network.
Parachains are nothing but shards running parallel to the Relay chain on the Polkadot blockchain. Here, the BTC Parachain implements a cross-chain framework dubbed XCLAIM that ensures that it remains completely permissionless, trustless, and resistant to any censorships. The announcement states:
The Interlay team is building a customized Substrate environment for PolkaBTC, optimized to verify Bitcoin payments. The BTC Parachain includes a Bitcoin cross-chain SPV client (BTC-Relay), integrations with secure price oracles and XCMP, as well as support for hardware wallets.
The BTC-Parachain will work on a completely decentralized network of individuals, companies, and community members. The BTC Parachain will also be completely open allowing anyone to participate and operate the bridge.
The wrapped Bitcoin PolkaBTC makes use of crypto-backed assets. Thus, BTC will be locked on the Bitcoin blockchain and unlocked on Polkadot in a 1:1asset dubbed PolkaBTC. Being native to the Polkadot ecosystem, PolkaBTC can also be transferred to other Polkadot parachains via XCMP/SPREE.
The Alpha testnet for BTC-parachain is scheduled for November next month. The Beta testnet showing all features will be available by January 2021.
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