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- Interlay, a Bitcoin (BTC) interoperability project that launched on Polkadot, has secured $3 million in a seed round to help it continue to develop its core decentralized financial product, marking yet another big capital raise in the blockchain sector
- Because of parachain and parathread technology, Polkadot has moved to the forefront of multi-chain development.
- According to Interlay, their interBTC product is fully backed by Bitcoin in a one-to-one ratio. Anyone may create interBTC by locking their Bitcoin or running their own vault because Bitcoin reserves are stored in collateralized vaults
Interlay, a Bitcoin (BTC) interoperability project that debuted on Polkadot, has raised $3 million in a seed round to further build its main decentralized financial product, marking yet another significant capital raising in the blockchain sector. Interlay’s interBTC platform, which allows users to invest, earn, and pay using Bitcoin on any blockchain, will benefit from the financing. InterBTC will extend to other blockchains, including Ethereum (ETH) and Cosmos after it was first commissioned for Polkadot.
After winning funding from Web3 Foundation, a technology steward for the decentralized web, Interlay began developing its Bitcoin bridge in early 2020. At this moment, it’s only a proof-of-concept, and Polkadot is up and running but not yet useful, but a firm called Interlay has developed a model for locking BTC on the Bitcoin blockchain and minting what it’s calling PolkaBTC on Polkadot with the help of a Web3 Foundation grant. If Polkadot proves to be a meeting point for many blockchains, the interoperability effort will have to deal with the original crypto asset, bitcoin.
Interlay says that their interBTC product is backed entirely by Bitcoin in a one-to-one ratio. Because Bitcoin reserves are held in collateralized vaults, anybody may manufacture interBTC by locking their Bitcoin or running their own vault. The product is supposed to be insured, implying that consumers can switch back to Bitcoin at any moment. IOSG Ventures led the seed round, which included Blockchain.com, Launchub Ventures, CMS Holdings, KR1, Hypersphere, and Zeeprime. Jihan Wu, co-founder of Bitmain, and Peter Smith, CEO of Blockchain.com, are among the angel investors.
Interlay’s initial strategic move is to connect Polkadot and Bitcoin safely and efficiently, according to Xinshu Dong, a partner at IOSG Ventures, who sees strong and decentralized infrastructure as a key enabler for multi-chain ecosystems. The rise of multi-chain networks is a significant development in the blockchain sector. Polkadot has risen to the forefront of multi-chain development, due in part to parachain and parathread technologies, which are meant to connect disparate networks.
The model utilized is identical to the one used by Keep to launch its tBTC system. A Polkadot smart contract manages a key to a Bitcoin blockchain wallet and validates its contents using simplified payment verification (SPV). That wallet is backed by Polkadot’s native coin, DOT, which is valued at 200 percent in the original design, though that might change. It issues PolkaBTC equal to the amount deposited after it validates that the BTC is there in the wallet it controls.
Once a PolkaBTC has been produced, it may be used everywhere on the Polkadot network, and any PolkaBTC holder can exchange it for genuine BTC at any moment. The BTC-Relay, launched by Interlay in April, monitors the BTC locked on Polkadot. Polkadot is developing BTC ahead of the use cases, which is a fundamental distinction between it and Ethereum. There are currently no DeFi products available to utilize PolkaBTC for lending or collateral.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
