Partnership with Interlay
LSDs Meet DeFi: Launching a Price Oracle for iBTC to Boost the Token’s Utility by Enabling its Easy and Transparent Integration into DeFi dApps.
Introducing Interlay
Interlay is building a one-stop shop for all things Bitcoin finance. BTC trading, lending, staking, and a way to deploy into other DeFi products. Trustless bridge at the core, AMM and money market on top, wrapped in a simple one-click interface with on/off-ramps and multi-chain support.
Kintsugi is Interlay’s canary network, a testnet with real economic value deployed on Kusama (Polkadot’s canary network). Kintsugi and Interlay share the same code base — with the difference that Kintsugi is 2–3 releases ahead of Interlay with more experimental features.
iBTC, Interlay’s flagship product, is Bitcoin on any blockchain. A 1:1 Bitcoin-backed asset, fully collateralized, interoperable, and censorship-resistant. In a similar way, kBTC represents BTC on the Kintsugi network.
We are delighted to enter a partnership with Interlay to build transparent, collateral-proofed price oracles for iBTC and kBTC. The feeds will enable easy integration of the liquid-staked derivatives into any DeFi protocol in any blockchain, fostering the tokens’ utility and use cases.
Alexei Zamyatin, co-founder of Interlay comments:
“We believe that collaboration is key to building a secure and transparent ecosystem for blockchain technology. Working with DIA to add iBTC and kBTC collateral proofing to their data feeds demonstrates our shared commitment to security and transparency. We are thrilled to have another pair of eyes on the security of the Interlay and Kintsugi BTC bridges and are proud to partner with DIA in promoting transparency in the industry.”
Price Oracles for iBTC and kBTC
DIA’s data infrastructure uniquely enables the creation of price feeds for Liquid Staked Derivates — LSDs, by employing a methodology based on fair price evaluation. The feed is developed by performing an on-chain, collateral ratio-driven check on the issuing protocol and leveraging an off-chain price feed for the base asset — BTC.
Partnering with DIA offers numerous benefits to Interlay and its assets, including the ability to diversify secure oracle support and ensure a higher level of security and reliability for its users. The collaboration also provides an extra pair of eyes on the security of the iBTC bridge, making it visible that it remains over-collateralized at all times.
Additionally, DIA’s unique approach to providing price feeds offers a reliable solution even if the trading activity is infrequent, and in the absence of centralized exchange listings of DeFi-focused assets. This added layer of security and reliability offers DeFi protocols that integrate iBTC a higher level of confidence and allows them to take into account the stronger security of iBTC over centralized wrapped BTC versions, due to its over-collateralization.
Overall, the partnership with DIA helps to enhance the security and transparency of Interlay’s assets, providing DeFi protocols and their users with greater peace of mind. The fair-value price feed will enable DeFi applications on any blockchain to list iBTC on their platforms. This will enable the feed to unlock a variety of DeFi use cases for the token including lending and borrowing, money markets, and many more.
How Does it Work?
To calculate the fair value-based price feed for iBTC the following methodology is used:
iBTC price = BTC price * (BTC in Interlay’s staking contract / iBTC total supply)
- Calculate the market price of BTC using trade data from multiple sources and apply a Moving Average with Interquartile Range — MAIR methodology.
- Perform a collateral check on Interlay, by calculating the ratio between the deposited BTC in Interlay and the total supply of iBTC.
- Multiple both results to get a fair-value price feed of iBTC.
Transparent and Customizable Delivery
DIA created a personalized price feed for Interlay, including custom update triggers and adjustment settings, to meet their specific needs. These configurations were requested through a Custom Delivery Request (CDR), publicly available in the DIA Forum.
→ CDR #026: Interlay | Price Feed
About DIA
DIA is a multi-chain, end-to-end, open-source data and oracle platform for Web3. The DIA platform enables the sourcing, validation and sharing of transparent and verified data feeds for traditional and digital financial applications. DIA’s institutional-grade data feeds cover digital asset prices, NFT floor prices, lending rates, FX rates and more.
DIA’s data is directly sourced from a broad array of on-chain and off-chain sources at individual trade-level. This allows DIA feeds to be fully customized with regards to the mix of sources and methodologies, resulting in tailor-made, high-resilience feeds and thereby setting a new paradigm for oracles.
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