Interlay has raised $6.5 million to launch Polkadot’s tokenized Bitcoin. The project intends to begin with tokenized Bitcoin on Polkadot and then spread to other Layer 1 blockchains.
Interlay, a Polkadot-based cross-chain interoperability project, has concluded a $6.5 million investment round. The financing was headed by DFG, with participation from IOSG, KR1, Hypersphere, Nexo Finance, D1 Ventures, and Signum Capital. It comes on the heels of a $3 million initial fundraising round in July 2021.
Interlay enables users to secure Bitcoin via the use of a decentralised network of collateralized vaults that connects Bitcoin with Polkadot. After that, users may create a Bitcoin-pegged currency called interBTC and utilise it inside the Polkadot ecosystem. interBTC may be used as collateral for DeFi financing as well as for other purposes such as yield farming.
Bitcoin tokenization is not a fresh idea. According to DeFiPulse, Ethereum already has 328,651 BTC worth around $16.1 billion in the form of BitGo’s Wrapped Bitcoin and Keep Network’s tBTC. Meanwhile, Interlay’s solution aims to be the first tokenized Bitcoin to be launched on Polkadot through its own parachain.
DFG founder and CEO James Wo said that the company was “very delighted to be an early backer of Interlay,” adding that the solution aimed to “extend the cross-chain possibilities for Bitcoin.”
Unlike other tokenized Bitcoin protocols, which often rely on centralised bridge contracts, the Interlay team asserts that interBTC is completely decentralised. The inventors of interBTC have created the decentralised protocol XCLAIM, which may be used to secure, issue, and redeem Bitcoin. The system is backed up by non-custodial collateral vaults that safeguard interBTC’s physical backing.
Alexei Zamyatin, co-founder and CEO of Interlay, addressed the project’s value proposition in the press release announcing the funding, stating that “Bitcoin DeFi has always relied on centralised suppliers” and that interBTC provides a “trustless and decentralised alternative.”
The interoperability project started its crypto adventure in March 2020, after a funding from the Web3 Foundation. It is now operating a canary network on Kusama named Kintsugi. Interlay’s next move, according to the team, is to launch a parachain. Polkadot has already ended its first round of parachain slot auctions and made the network available to the first five auction winners.
Interlay will take part in Polkadot’s second round of auctions, which will begin on Dec. 23, 2021. Interlay intends to link interBTC with DeFi projects that already have their own parachains, like as Acala and Moonbeam, if it obtains a parachain. Following that, it hopes to deploy on more networks like as Ethereum, Cosmos, Solana, and Avalanche. The author of this post held ETH and other cryptocurrencies at the time of publication.
Also Read: Bitcoin Will Eventually Replace The United States Dollar, Jack Dorsey Tells Cardi B
Wallets