Bitcoin is about to be connected to Polkadot. Learn about the design and roadmap of PolkaBTC in this article (www.blockcast.cc)

比特币即将接入波卡，一文了解PolkaBTC的设计和路线图

In early 2021, Interlay will launch Polkadot’s first trustless packaged Bitcoin, PolkaBTC, which is a key step for Polkadot towards a truly interoperable ecosystem.

Interlay has previously released a detailed technical specification [1] and a PoC implementation under implementation [2]. After the successful pilot project, Interlay is now stepping up its efforts to complete the BTC parachain in the first quarter of 2021. This project has also received follow-up funding from the Web3 Foundation. The first Alpha testnet is scheduled to be launched in November 2020, and a functional beta version will be launched in January 2021. You can register here to get early access and the right to test PolkaBTC[3].

Once deployed, users will be able to mint 1:1 Bitcoin-backed assets on Polkadot, namely PolkaBTC, and can use these assets in a wide range of applications, including decentralized exchanges, stablecoins, and lending protocols. Behind the scenes, BTC Parachain implements XCLAIM [4], which is the only cross-chain framework that does not require trust, permission, and review in finance, and is supported by top research [5].

The uniqueness of BTC Parachain lies in its strict commitment to trustlessness and openness:

No need to trust: this bridge chain has no central authority. From the beginning, BTC Parachain will be run by a decentralized network composed of individuals, community members and companies.
Open: In the spirit of permissionless systems such as Bitcoin, anyone can participate in the operation of the bridge chain: Contrary to other methods, you don’t need permission or any additional tokens to become a maintainer and start earning fees

As a PolkaBTC holder, you have the following guarantee: You can convert PolkaBTC into BTC at any time, or get compensation from mortgage funds at a preferential interest rate. If the vault misbehaves, you will be compensated from the collateral in the vault and make very profitable transactions between BTC and DOT. At launch, the mortgage assets will be listed in the DOT. In the medium/long term, this can be extended to stablecoins or token pools to improve stability.

All in all, to trust this bridge chain, you only need to:

Believe that Bitcoin is safe. It means to believe that the Bitcoin block is the final block after X blocks are confirmed. The bridge chain recommends at least 6 confirmations, although users and applications are encouraged to set higher thresholds.
Believe that Polkadot is safe. This assumption is implemented by all applications running on Polkadot.

Please continue reading to better understand the design and security assurance of BTC-Parachain.

route map

The Interlay team is building a customized Substrate environment for PolkaBTC and optimizing it to verify Bitcoin payments. BTC Parachain includes Bitcoin cross-chain SPV client (BTC relay), integration with secure price oracles and XCMP, and support for hardware wallets. In addition, Interlay is also developing client software for Vaults, Staked Relayers (which ensures that BTC relays are up to date), and an easy-to-use web interface.

The first Alpha testnet is scheduled to be launched in November 2020, and a fully functional Beta testnet will be launched in January 2021. Once the code base audit is completed in February 2021, and parachains are enabled on Polkadot and Kusama, BTC Parachain will go live: first on Kusama and then on the Polkadot mainnet.

Register here to get early access to PolkaBTC and be the first to test the first truly decentralized cross-chain bridge! [6]

比特币即将接入波卡，一文了解PolkaBTC的设计和路线图

Plan integration

The Interlay team has started to work with the team built on Polkadot so that PolkaBTC can be accessed as early as possible:

Acala and Interlay are exploring different mortgage scenarios between Acala’s aUSD stablecoin and PolkaBTC
Larminar is exploring cooperation with Interlay to provide cross-chain liquidity for the Polkadot ecosystem
Plasm Network is providing PolkaBTC for its highly scalable DAPP
Equilibrium[7] is planning to provide PolkaBTC to the cross-chain DeFi market
Edgeware hopes to support PolkaBTC in its WASM smart contract
Moonbeam (developed by PureStake) plans to combine PolkaBTC with its Ethereum-compatible smart contract platform
Polkaswap supports PolkaBTC transactions on decentralized exchanges supported by AMM
Chorus One[8] will explore how to make PolkaBTC available to the Cosmos SDK ecosystem through the Cosmos – Substrate IBC bridge.

If you are building a project on Polkadot and want to integrate with PolkaBTC, please visit https://www.polkabtc.io/%5B9%5D or email polkabtc@interlay.io[10].

design

PolkaBTC makes so-called cryptocurrency-backed assets useful: BTC is locked on Bitcoin, and PolkaBTC is unlocked on Polkadot in the form of 1:1 backed assets. PolkaBTC can be used like any local asset in the Polkadot ecosystem. In other words, using XCMP/SPREE, PolkaBTC can be easily transferred to other parachains.

Vaults: intermediaries without permits and guarantees

An important part of BTC-Parachain is Vaults. The vault is an intermediary institution that does not require trust and guarantee, ensuring that Bitcoin is still locked on the Bitcoin network in the presence of PolkaBTC. Any user can become a vault by providing DOT collateral to protect BTC. This means that, as a user, you are free to choose any vault you like, or become your own vault. If you want to be extra cautious, you don’t have to trust anyone.

The correct behavior of the vault is enforced by BTC Parachain. Specifically, the vault must prove the correct behavior of BTC Relay, a Bitcoin SPV client implemented directly on Polkadot. If the vault tries to steal BTC, BTC Parachain will detect this: the vault will lose its mortgaged DOT and the user will be compensated (preferential interest rate).

Staked Relayers: Stay safe and alive

Staked Relayers simultaneously monitor Bitcoin and BTC Parachain, and ensure that the BTC relay and the Bitcoin main chain are kept up to date (submit Bitcoin block headers to BTC Parachain). If there is a major attack on Bitcoin or BTC Parachain, Staked Relayers can vote to block the bridge until the problem is resolved. Note: BTC relay has a self-healing function, which can automatically detect and recover from Bitcoin forks.

User: Issuing, trading and redeeming PolkaBTC

You only need (i) BTC and (i) a small amount of DOT to pay the handling fee, and you can mint PolkaBTC by yourself:

Issuance (coin minting): Create PolkaBTC on BTC Parachain by locking BTC with a vault. To map your PolkaBTC, you can submit your BTC payment certificate yourself, or simply use Interlay’s monitoring service to do it automatically.
Transaction: You can transfer PolkaBTC to other users or applications on any other Parachain in the Polkadot ecosystem.
Exchange: To exchange the same amount of BTC for PolkaBTC, you can burn PolkaBTC tokens on the BTC Parachain. Then, a vault (selected by you or automatically allocated by the bridge) sends the BTC to your Bitcoin address. If a vault tries to misbehave, the DOT it pledged will be slashed. As a user, you can decide to use another vault to try again, or reimburse in DOT, including the loss due to inconvenience.

比特币即将接入波卡，一文了解PolkaBTC的设计和路线图

PolkaBTC can be used on Polkadot indefinitely (no expiration date) and can be exchanged for BTC at any point in time. To use PolkaBTC on Polkadot, you don’t even need a Bitcoin wallet until you decide to exchange PolkaBTC for native Bitcoin.

About Interlay

Interlay envisions a future where allowable and permissionless blockchains can be seamlessly connected and interacted regardless of design and purpose. From trustless loans to decentralized derivatives and exchanges, users should access their favorite digital currencies and financial products on any blockchain platform.

Interlay is building cross-chain infrastructure and DeFi products, and is supported by top research:

PolkaBTC ([11]), the official trust-free Bitcoin-Polkadot bridge, cooperates with Parity, and is funded by the Web3 Foundation. As the main gateway of BTC, PolkaBTC will help guide Polkadot’s young DeFi ecosystem. The launch time is scheduled for the first quarter of 2021.

XOpts ([12]), the first trustless and non-custodial platform for cross-chain BTC. Our vision for XOpts is to become an option and other derivative products equivalent to Uniswap. XOpts can also be used as a decentralized exchange for BTC (real option settlement), enabling cross-chain transactions for stablecoins and DeFi tokens without the need for price oracles or packaged BTC. It is planned to be launched on Ethereum in the first quarter of 2021, and will be expanded to Polkadot etc. later in 2021.

Interlay was founded by PhDs from Imperial College London. A team of researchers, engineers and former lawyers brings together expertise in blockchain interoperability, security, cryptoeconomics, derivatives and financial regulation.

Reference link

[1] Technical specifications:

[2] PoC implementation:

[3] PolkaBTC:

[4] XCLAIM:

[5] Top research:

[6] https://forms.gle/JrNBD6Pe1F5QAg4z8:

[7] Equilibrium:

[8] Chorus One:

[9] https://www.polkabtc.io/:

[10] polkabtc@interlay.io: mailto:polkabtc@interlay.io

[11] https://polkabtc.io/: