New Tokenized Bitcoin Coming To Polkadot in Q1 2021 — 'PolkaBTC'

A new form of tokenized bitcoin, "PolkaBTC," is set to be released onto the Polkadot blockchain network in Q1 2021.

Blockchain startup Interlay will launch PolkaBTC, backed 1:1 by bitcoin (BTC). Interlay is funded by the Web3 Foundation, which oversees the development of Polkadot.

PolkaBTC could be seen as a rival to popular WBTC, which is built on the Ethereum blockchain. Interlay said what makes PolkaBTC unique is its "strict dedication to being trustless and open," meaning that it would have no central authority and be permissionless like the bitcoin system.

"Right from the start, the BTC-Parachain will be run by a decentralized network of individuals, community members, and companies," said Interlay. "You do not need permission or any additional token to become a maintainer and start earning fees."

Polkadot's native DOT token would be used as collateral for minting PolkaBTC. "Any user can become a Vault by simply locking DOT collateral. The only requirements are (1) a Bitcoin wallet, (2) a Polkadot wallet, and (3) some DOTs," said Interlay.

Users would then be able to transfer minted PolkaBTC to other users or decentralized applications built on Polkadot.

To redeem PolkaBTC for the equivalent amount of BTC, they would need to burn PolkaBTC tokens on the BTC-Parachain. "PolkaBTC can remain on Polkadot indefinitely (no expiry date) and can be redeemed for BTC at any point in time," said Interlay. Read More

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