Tokenized Bitcoin to launch on Polkadot in early 2021

Interlay in the first quarter of 2021 will launch a 1:1 BTC-backed PolkaBTC on the Polkadot network, according to the project’s blog.

The token’s developers say its governance will be decentralized and censorship-resistant, as is the Bitcoin blockchain itself. PolkaBTC will be another tokenized BTC, like WBTC and tBTC, but on the Polkadot blockchain.

“From the very beginning the BTC-Parachain [the so-called ‘bridge’ between the Bitcoin and Polkadot blockchains] will be controlled by a decentralized network of users, the community, and companies,” the blog says.

PolkaBTC will be backed by the Polkadot token (DOT).

“Any user can lock DOT as collateral. The only requirements: Bitcoin and Polkadot wallets and several DOT,” the blog notes.

PolkaBTC creation and burning diagram. Source: Polkadot.Network.

After obtaining PolkaBTC, users will be able to send the tokens to addresses, including decentralized applications on Polkadot.

To redeem PolkaBTC for an equivalent amount in BTC, minting and burning PolkaBTC on the BTC-Parachain will be required. Minting and burning can be performed at any time.

The developers plan to release the first alpha test network of PolkaBTC in November 2020. They expect its beta version to launch in January 2021. Mainnet launch is planned for Q1 2021.

PolkaBTC roadmap. Source: Polkadot.Network.

PolkaBTC will receive support from Polkadot-based projects, including Acala, Equilibrium, Chorus One, Plasm Network, Moonbeam and Polkaswap.

In addition to PolkaBTC, the Interlay team is also working on ‘XOpts’ — a non-custodial cross-chain Bitcoin-options platform.

“XOpts could become the Uniswap equivalent for options and other derivatives. XOpts will act as a decentralized exchange for BTC (for option settlement). This will enable cross-chain trading against stablecoins and DeFi tokens without price oracles or ‘wrapped’ BTC,” the developers noted.

Launch of XOpts is planned for Q1 2021 on Ethereum. In the future, expansion to Polkadot and other blockchains is expected.

Earlier, Interlay received a grant from the Web3 Foundation to develop a bridge between the Bitcoin and Polkadot blockchains.

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