There is a substantial race in the crypto industry to ace the field of tokenized Bitcoin to bring the liquidity of Bitcoin to the Decentralized Finance platforms. Right now, Ethereum rules the DeFi space; however, blockchain companies like Polkadot want to ensure that DeFi reaches ahead of ETH. Thus, the company has now announced a project to develop systems to incorporate Bitcoin on its platforms. The Interlay team would be working on the PolkaBTC project.
PolkaBTC To Tap Popularity of Tokenized Bitcoin.
Polkadot is venturing in the tokenized bitcoin space to ensure they get the bitcoin liquidity on the various DeFi solutions on the parachain of the Polkadot network. The company wants to harness BTC’s growing rage on Ethereum as currently around 1.6 Billion USD worth of bitcoins are available on the Ethereum blockchain. With its PolkaBTC token, Polkadot wants to tap a substantial market share of the potentially profitable crypto avenue.
The PolkaBTC token would be available in the first quarter of 2020 after the BTC parachain is launched. The BTC parachain would use the Xclaim framework for secure and safe processing.
The Bitcoin would be easily interoperable on polkadot ecosystem making it suitable for DeFi platfoms as well. Since the bitcoin token can work with multiple blockchains simultaneously, the DeFi and PolkaBTC chains can likely reach a much more comprehensive range than just Ethereum.
Polkadot blockchain and the network would use a cross-chain bridge for leveraging the bitcoin liquidity. Once the parachain is live by next year, the Polkadot users can lock their Bitcoin and then issue the Polkadot tokenized bitcoin PolkaBTC that is backed 1:1. For getting bitcoin off their tokens, one would have to release the PolkaBTC on the parachain.
Polkadot Native Token DOT To be Used on PolkaBTC
The BTC Parachain would work on a decentralized network so the crypto users can access it without any permission or any extra tokens to start earning fees by becoming a token maintainer. The native token would be used for mining Polkadot. So, any user having a Polkadot wallet, DOT tokens, and BTC wallet can start mining PolkaBTC with ease.