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Polkadot To Introduce Bitcoin As A Wrapped Asset ‘PolkaBTC’ In Early 2021

Bitcoin 2020/10/16 18:45 by Bernice Nyambura
Polkadot To Introduce Bitcoin As A Wrapped Asset 'PolkaBTC' In Early 2021

Open-source blockchain network Polkadot has announced that wrapped Bitcoin is coming to its protocol, as PolkaBTC, to enhance true interoperability in blockchain networks in January 2021.

PolkaBTC will ensure several guarantees for its holders, including the ability to always redeem PolkaBTC for BTC, get reimbursement at a beneficial rate in the collateral currency, and access vault insurance through Polkadot’s native currency, DOT.

Polkadot wrote on Twitter:

“Bitcoin is coming to Polkadot! @InterlayHQ will introduce Polkadot’s first trustless wrapped @Bitcoin- PolkaBTC-in early 2021. This marks an exciting step towards a truly interoperable blockchain ecosystem.”

A wrapped asset is a digital coin represented in the native token of a particular blockchain to make the process of token transfer across different blockchains possible, faster, and efficient.

PolkaBTC Guarantees Safety and Security

As a Nominated Proof-of-Work network, Polkadot allows any type of data, including tokens, to be transferred across different blockchains, whether they are public, private, permissionless, or permissioned.

This allows developers on Polkadot to build decentralized applications that can query a private blockchain and use the information on public blockchains.

Polkadot’s developer startup Interlay has already run a successful pilot project and expecting to launch its first Alpha testnet on November 20 before introducing a feature-ready Beta network in January 2021.

“Once deployed, users will be able to mint 1:1 bitcoin-backed assets onto Polkadot as Polka BTC, and use these across a wide range of applications, including decentralized exchanges, stablecoins, and lending protocols.”

Polkadot also stated that at the time of launch, DOT will be used as the primary collateral, but with plans to introduce other token-sets and stablecoins to improve stability. Eight developers are already working with Interlay’s team to build on PolkaBTC including Acala, Lamina, and Plasma Network.

Polkadot Vs Ethereum

The central governing function of Polkadot that’s responsible for network security, interoperability, and the consensus is built with Substrate, which is considered to be the best technology for building a blockchain and smart contracts. Building with Substrate also makes blockchains and smart contracts natively compatible with Polkadot.

Polkadot was launched in the middle of the short bull run between August and September as an open-source blockchain project founded by the Web3 Foundation.

Its perception as an Ethereum Killer, that’s also better than both Cardano and Chainlink, caused its price to soar from $2.82 to $6.82, between the launch date on August 20 and September 1.

Polkadot is listed in some of the world’s largest exchanges, like Binance, Coinbase, Huobi, and Kraken. DOT is currently trading at $3.91, with a circulating supply of 852,647,705 DOT and a total supply of 987,964778 DOT.

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