Interplay launches wrapped Bitcoin on Polkadot

Interlay has launched a wrappedBitcoin iBTC on the Polkadot chain. The product intends to widen the use of BTC for DeFi, cross-chain transfers, NFTs, and more. iBTC is already compatible with Acala and Moonbeam. The developers have put up $1 million of funding to extend the project to other chains. Plans are in place to launch on Avalanche, Cosmos, Solana and Ethereum soon.

Interlay's mission is to realize the true nature of BTC by extending its use to any blockchain.

The company has stated that there is a network of vaults that are open for anyone to run and operate their own vault. Users lock theirBitcoin collateral in a vault, which then mints and issues iBTC to the user.

Interplay said iBTC is 1: 1 backed and redeemable withBitcoin. In the event of vault failure, the locked BTC is insured and reimbursed.

Interlay co-founder and CEO Dr. Alexei Zamyatin said iBTC brings trust and security to more technologically innovative chains. The project said iBTC is different from other cross-chain bridges in that users need only trustBitcoin and Polkadot. There is an automatic reimbursement process for lost BTC from the collateral insurance, and there is no single point of failure.

Several high-profile hacks, including the Nomad hack, which was drained for $190 million, and the Ronin hack, where attackers netted $615 million, have put cross-chain bridges firmly in the spotlight.

A report from Chainalysis said $2 billion was lost this year due to cross-chain bridge hacks. This type of cybercrime accounts for 69% of all stolen criptocurrency funds.

Chainalysis researchers said the issue has become so prevalent that it is a significant threat to public trust in the technology of the digital ledger.

In order to combat the problem, Chainalysis called for more rigorous code audits and the use of established smart contract code to serve as a template for new projects.