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The BTC-Parachain allows users to mint 1:1 Bitcoin-backed assets onto Polkadot — PolkaBTC — and use these across a wide range of applications, including decentralized exchanges, stablecoins, and lending protocols.
The Interlay team is building a customized Substrate environment for interBTC, 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. In addition, Interlay is also building client software for Vaults, Relayers (who make sure BTC-Relay is up to date), as well as an easy-to-use web interface.
Interlay has previously released a detailed technical specification and a working PoC implementation. After the successful pilot project, Interlay won a second Web3 Foundation grant to complete the BTC Parachain — the core milestones of this project were completed in March 2021.
- (Soon) Interlay on Polkadot: Interlay is going to Polkadot parachain auctions in batch 2, starting December 23rd 2021
- (Now) Kintsugi to Kusama: kBTC on Kusama and KINT airdrop planned before Christmas 2021.
- Kintsugi wins 11th Kusama parachain slot on 13 October 2021
- Feature-ready Beta launched on 2 March 2021
- Alpha testnet launched in November 2020
- 2nd Web3 Foundation grant (Full Implementation) started in September 2020
- 1st grant completed in April 2020
- 1st Web3 Foundation grant (Spec & PoC) started in January 2020
- XCLAIM paper describing the tech underlying interBTC published in 2018
Key Features and Highlights
A user (liquidity provider) mints new interBTC.
- A Vault locks DOT as collateral with the interBTC bridge (the Interlay BTC Parachain).
- A user creates an issue request with a collateralized Vault of his choosing. This reserves the Vault’s DOT collateral.
- The user then sends BTC to the Vault.
- The user proofs to the interBTC bridge that it send the BTC to the vault (using a transaction inclusion proof against the BTC Relay).
- Upon successful verification of the proof, the user mints interBTC and receives the tokens to his or her account balance.
High-level interBTC Issue process
A user redeems interBTC for the equivalent amount of BTC or receives DOT as reimbursement.
- To request a redeem, a user locks interBTC with the interBTC bridge (Interlay BTC Parachain).
- The Parachain instructs a Vault to execute the redeem.
- The Vault transfers the correct amount of BTC to the user.
- To unlock the DOT collateral, the Vault submits a transaction inclusion proof to BTC-Relay.
- If the proof is correct, the Parachain releases the Vault’s DOTs.
- If no valid proof is provided on time, the Parachain slashes the Vault’s DOTs and reimburses the user at a beneficial exchange rate.
High-level interBTC Redeem process
Alexei Zamyatin — Founder & CEO
Dominik Harz — Founder & CTO.