The non-profit organization behind Polkadot, which is the Web3 Foundation, has decided to finance a new bridge that links the blockchain Polkadot network to Bitcoin (BTC).
The London-based developer company Interlay is going to be funded by Web3 and build a BTC Parachain that brings BTC-backed assets onto the Polkadot network. The parachain will use the open source XCLAIM framework and leverage collateralized intermediaries.
Polkadot Uses Parachains to Link Other Networks
Polkadot was launched back in 2016 by Gavin Wood, the co-founder of Ethereum. They connect and launch blockchain-based apps by employing parachains to link various networks. As soon as the Polkadot BTC bridge is be finished, users can access and employ the parachain in order to create PolkaBTC on the 1:1 rule by using their deposited BTC. The original BTC will be redeemable at any time. Here’s what Interlay had to say about XCLAIM:
“XCLAIM is on average 95% faster and 65% cheaper than using HTLC atomic swaps with Bitcoin.”
The Parachain Stores DOT Collateral
The parachain is completely interoperable on the Polkadot ecosystem and stores DOT collateral that users can have allocated through a premium in case the redemption process fails. The Web3 Foundation is regulated in Switzerland and has been issuing grants between $3,000 and $100,000 to different projects that aim to improve the Polkadot platform.
According to Web3’s GitHub page, the foundation has financed almost 100 projects in 5 different funding waves until now. Some of its other projects are a Metamask plugin, an EOS interoperability bridge and a parachain that Links Polkadot to the future Libra ecosystem.
The Polkadot Ecosystem Fund
Back in October 2019, Web3 launched a Polkadot ecosystem fund with Polychain Capital. While it hasn’t been mentioned how much this new fund had set aside, the sum was in the millions, said a spokesperson then. How much Interlay is going to receive is not yet clear, as grant amounts for each team are not to be disclosed, mentioned another spokesperson.