Bitcoin is about to enter the Polka Ecology: understand the progress and design of PolkaBTC

0

 391 total views

How far is Bitcoin from Polkadot? The Bitcoin anchor coin PolkaBTC is scheduled to go online early next year.

Original title: “In-depth 丨 Reading the first BTC anchor coin on Polkadot: PolkaBTC”
Written by: Polkadot
Translation: Li Hanbo

In early 2021, Interlay will launch Polkadot’s first trustless Bitcoin anchor coin, PolkaBTC, marking a critical step towards a true interoperability ecosystem.

Prior to this, Interlay has released detailed technical specifications and PoC implementation methods. After the success of the pilot project, Interlay is currently accelerating its efforts to complete the BTC Parachain in the first quarter of 2021, which is funded by the Web3 Foundation. The first Alpha testnet is planned for November 2020, and the functionally ready Beta version is planned for January 2021.

Once deployed, users will be able to transfer 1:1 Bitcoin assets to Polkadot in the form of PolkaBTC, and use these assets in numerous applications, including decentralized exchanges, stablecoins, and lending protocols. BTC-Parachain implements XCLAIM, which is the only financially trustless, permissionless, and censorship-resistant cross-chain framework – and it is supported by top research.

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

Trustless : The bridge does not have a centralized organization. From the beginning, BTC-Parachain will be run by a decentralized network composed of individuals, community members and companies.
*
No permission *: In the spirit of permissionless systems such as Bitcoin, anyone can participate in operating this bridge: Contrary to other methods, you don’t need permission or any additional tokens to become a maintainer and start earning .

As the holder of PolkaBTC, you have the following rights: You can redeem PolkaBTC as BTC at any time, or repay it in mortgage currency at a favorable interest rate. In the event of improper behavior of the treasury, you will receive compensation from the collateral of the treasury and conduct very favorable transactions between BTC and DOT. At startup, the collateral will be placed in the DOT. In the medium/long term, this may be extended to stablecoins or other tokens to improve stability.

In summary, to trust this bridge, you only need to:

Believe that Bitcoin is safe . It means: I believe that the Bitcoin block will be written into the main chain of the block after X times of confirmation. The bridge recommends at least 6 confirmations, but encourages users and applications to set a higher threshold.
*I
believe Polkadot is safe *. All applications running on Polkadot will make this assumption.

Read on to better understand the design and security assurance of BTC-Parachain.

route map

The Interlay team is creating a customized Substrate environment for PolkaBTC to optimize the verification of Bitcoin payments. BTC Parachain includes a Bitcoin cross-chain SPV client (BTC-Relay), integration with price oracles and XCMP, and support for hardware wallets . In addition, Interlay is also building client software for Vaults and Staked Relayers, as well as an easy-to-use web interface.

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

Bitcoin is about to enter the Polka Ecology: understand the progress and design of PolkaBTC

plan

The Interlay team has started to work with the team built on Polkadot to achieve early access to PolkaBTC.

  • Acala and Interlay are exploring different collateral use cases between Acala’s aUSD stablecoin and PolkaBTC.
  • Laminar Laminar is exploring cooperation with Interlay to provide cross-chain liquidity for the Polkadot ecosystem.
  • Plasm Network is seeking to provide PolkBTC to its highly scalable DApps.
  • Equilibrium is planning to provide PolkaBTC on the cross-chain DeFi currency market.
  • Edgeware is seeking to support PolkaBTC in its WASM smart contract.
  • Moonbeam (developed by PureStake) is planning to use PolkaBTC with its Ethereum-compatible smart contract platform.
  • Polkaswap supports the trading of PolkaBTC on AMM-driven decentralized exchanges.
  • Chorus One will discuss how to make PolkaBTC available to the Cosmos SDK ecosystem through the Cosmos-Substrate IBC bridge.

design

PolkaBTC assets are linked to BTC. BTC is locked on the original chain and unlocked on Polkadot in a 1:1 format-PolkaBTC. PolkaBTC can be used like any local asset in the Polkadot ecosystem. This means that PolkaBTC can be easily transferred to other Parachains via XCMP / SPREE.

Vault: Unlicensed & Mortgage Intermediary

An important part of BTC-Parachain is Vaults. Vaults are intermediaries that distrust and provide collateral guarantees. It ensures that while PolkaBTC exists, BTC is still locked on Bitcoin . Any user can establish Vaults by providing DOT collateral to ensure the safety of BTC. This means: as a user, you are free to choose any vault you like, or you can make your own vault. If you want to be extra cautious, you don’t have to trust others.

The correct behavior of Vaults is performed by BTC-Parachain. Specifically, Vaults must prove correct behavior to BTC-Relay-BTC-Relay is a Bitcoin SPV client implemented directly on top of Polkadot. If Vaults try to steal BTC, this will be detected by BTC-Parachain: Vaults will lose their collateral and users will be compensated .

Staked Relayers: Stay safe and alive

Staked Relayers monitor both Bitcoin and BTC-Parachain, and ensure that BTC-Relay is synchronized with the main Bitcoin chain (submit Bitcoin block header to BTC-Parachain). If there is a major attack on Bitcoin or BTC-Parachain, Staked Relayers can vote to stop the bridge until the problem is solved. Note: BTC-Relay is self-healing, and will automatically detect and restore Bitcoin forks .

User: issuing, trading, and redeeming PolkaBTC

To mint your own PolkaBTC: You only need BTC and a small amount of DOT to pay for the fee.

Mint: Create PolkaBTC by locking BTC and Vaults on BTC -Parachain. To claim 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 any other Parachain applications in the Polkadot ecosystem.

Exchange : To exchange PolkaBTC into the same amount of BTC, you need to burn PolkaBTC on BTC-Parachain. Then, a Vault (selected by you or automatically allocated by the bridge) will send BTC to your Bitcoin address. If a Vault tries to cheat, its collateral will be destroyed. As a user, you can decide to retry with another Vault, or reimburse with DOT.

Bitcoin is about to enter the Polka Ecology: understand the progress and design of PolkaBTC

PolkaBTC can remain 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 in which, regardless of design and purpose, permissioned and permissionless blockchains can be seamlessly connected and interacted. From loans to decentralized derivatives and exchanges, users can access their favorite digital currencies and financial products on any blockchain platform.

With the support of top research, Interlay is building cross-chain infrastructure and DeFi products.

With the funding of the Web3 Foundation, in cooperation with Parity Technologies, the official trustless Bitcoin-Polkadot bridge-PolkaBTC was launched. As the main BTC gateway, PolkaBTC will help guide Polkadot’s young DeFi ecosystem. It is scheduled to be launched in the first quarter of 2021 .

Interlay was founded by a Ph.D. from Imperial College London. Its team consists of researchers, engineers and former lawyers. It brings together expertise in blockchain interoperability, security, cryptoeconomics, derivatives and financial regulation.

Source link: polkadot.network