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Our Biggest Update Yet

Ecosystem Update #5: 19 August 2022

iBTC has arrived, and it’s making waves

The most highly-anticipated Ecosystem Update in Interlay history is here.

Yeah. iBTC is live.

Grab a coffee, sit down, and get ready for one of the most important moments in Bitcoin history that has nothing to do with pizza, although we kinda wish it did.

Disclaimer: This is not investment advice. Cryptocurrency investment is subject to high market risk. Please do your own research and make your investments cautiously.

Highlights

iBTC is Live

On August 10th, after years of research, with a team that started as 2 Ph.D. students and grew to 25 talented core team members, we’re thrilled to announce that iBTC is now minting. The network of independent Vaults is up and running, and the first truly decentralized, trustless, and insured Bitcoin bridge is now live.

You can jump on the DApp right now and mint iBTC.

The launch of iBTC reached international news, with headlines in CoinDesk, CryptoSlate, CoinTelegraph, and more. Check out the articles below:

Why is iBTC Vital to the Entire Crypto Industry?

In the past few years, as humanity experienced collective change, loss, and grief around the globe, interest in Cryptocurrency has grown. With that growth, the formation of subcultures around certain blockchains has grown divisive, like many other aspects of society.

As the global collective consciousness searches for new ways to move forward, there will always be backlash. We’ve seen a surge in government crackdowns, along with large-scale hacks. Cryptocurrency as a movement is on the precipice of large adoption and completing the mission set out by Satoshi Nakamoto when they released the Bitcoin whitepaper in 2008: creating an inflation-proof, decentralized currency that is powered by populous, not central banks and government institutions.

While we’re at this bleeding edge of massive change in currency and power structures, we are kicking the hornet’s nest. The people who benefit from centralized systems of finance and government will not like how quickly we are moving towards adoption.

Julius Caesar knew what he was talking about when he said, “divide and conquer” which is why the following statement is important enough to use the double-block quote feature on Medium:

The maximalist vs. maximalist arguments have only alienated the millions of people who are on the brink of entering into crypto.

It’s time to bridge the gap between blockchains, ecosystems, and communities in crypto. The word bridge has not had a good reputation in the past few months with multiple large-scale hacks of bridges.

Interlay is different. How can we prove this to you? In the words of Satoshi Nakamoto, “I’m better with code than with words.”

iBTC’s Academic Peer Reviews and Audits

Interlay’s original design was first introduced (skip to 1:47:00) at the Scaling Bitcoin developer conference in 2018, but the research behind the first decentralized Bitcoin bridge started years prior. After its initial presentation, Interlay, and in tandem, iBTC, went through rigorous academic peer-review by experts and has been presented to the Ethereum and Polkadot communities. It’s been audited by NCC, Informal Systems, Quarkslab, and SRLabs.

Everything Interlay does is strictly audited with multiple bug bounty programs. Being a part of the Polkadot and Kusama ecosystems has given us the advantage to battle test iBTC on our canary network, Kintsugi, through kBTC. We stand by what we create, our code is open-sourced, and we’re confident in the new path we’re forging.

“Bitcoin is the driving force behind global crypto adoption, while Polkadot, Ethereum & co. is where technological innovation is happening. With iBTC, we combine the best of both worlds, while preserving the trustless nature of Bitcoin.” — Dr Alexei Zamyatin, Interlay co-founder & CEO

Next Steps — Roadmap Update

1. Onboard more Vault Operators

iBTC is taking off, but we cannot scale without more vault operators. We need you! Check out our Vault one-pager here, and dive in to learn everything you need to know about Vaults on our docs. If you would like to operate an iBTC vault, please fill out this quick questionnaire so we can reach out with all the information you need to get started. Seriously, we’ll slide into your DMs (or email, Telegram, whichever your preferred form of contact is) faster and smoother than Trea Turner sliding into home base at the August 2021 Dodgers vs. Phillies game. Trust me, even if you don’t like baseball, you’ll appreciate this.

Us smoothly sliding into your DMs if you want to join our network of Vault Operators

2. Open more XCM Channels Across the Polkadot Ecosystem

Bringing Bitcoin to DeFi is made possible through the diversity of the Polkadot ecosystem. To make iBTC truly interoperable, we plan to open XCM channels with more parachains. The XCM channels with Acala and Moonbeam were both successfully opened via community governance. More are to come soon — following Interlay’s goal to bring BTC to all Dotsama parachains and beyond.

Both Astar and Parallel XCM channels are in the process of being opened through governance. Opening an XCM channel is a multi-step process since both parachains have to pass the proposals via governance vote before the channel can be opened. Vote below:

3. More DeFi integrations

Now that XCM channels and therefore DeFi integrations have launched with Acala and Moonbeam, we’re in the process of adding more iBTC AMM pools, interesting multi-pools, as well as lending and borrowing. If the governance proposals on both sides pass to open an XCM channel with Astar and Parallel, new iBTC use cases can be launched in these ecosystems.

The DeFi Playbook for Each New Integration:

  1. INTR pool
  2. iBTC pool
  3. Source iBTC liquidity
  4. Then move on to lending, borrowing, and more sophisticated integrations.

Looking forward, we hope to open channels to other ecosystems, such as Ethereum, Avalanche, and Solana, making Interlay and Polkadot the interoperability hub for Bitcoin.

Crypto Ecosystem News

Nomad Hack

Shortly before iBTC launch, the hack of the Nomad bridge shook the Moonbeam ecosystem. While the issue was not caused by the bridge design itself, the loss of 200 million in assets caused turmoil nonetheless.

The Interlay network itself was not affected, yet a lot of the use cases in the pipeline for launch, like stable pools against wBTC, relied on Nomad assets and had to be postponed. Nevertheless, with the help of our launch partners Acala, and teams from the Moonbeam ecosystem, including Stellaswap, we launched iBTC on schedule with a set of compelling and Polkadot-native use cases.

Acala Hack

We want to start off by saying that the Interlay parachain was not affected by the Acala exploit. Any source that says otherwise was misinformed. We will always be open and honest with our community, and if we are ever impacted by a hack, you will be the first to know.

We have been monitoring the Acala exploit closely: Interlay as a network and iBTC as a product have not been compromised. The incident has not jeopardized Interlay as a network, nor iBTC as a product in any way. All system operations have been and remain fully functional.

Acala had an iBTC/aUSD pool (alongside other pools with non-Interlay assets) that had just launched and had low liquidity — 2.74627356 iBTC at the start of the attack. iBTC was merely one of the assets traded on the Acala DEX that the attacker apparently tried to purchase with the “falsely minted” aUSD.

Attention: Users, including iBTC users who were LPs in DEX pools that were targeted by the attacker(s) may see financial damage from selling assets against the falsely minted & hence depegged aUSD.

Regarding more details about the attack, detailed metrics around financial damage caused to LPs in the pools, as well as aUSD design aspects and possible improvements after the incident — the Acala team have the most insight into the current situation and have been very responsive.

We respect the Acala team for handling the situation in a highly professional manner, doing all in their ability to recover funds and keep users loss-free. As we forge new territory in the blockchain and DeFi world, no one is immune to critical security breaches, and the more we work together to make the technology stronger, the less likely they will be in the future.

See Acala forum for the latest updates.

Governance

Interlay Governance

Register LDOT as a foreign asset on Interlay

We currently have a governance proposal open to register LDOT as a foreign asset on Interlay. Vote here:

Use Treasury Funds To Incentivize iBTC / GLMR pool on StellaSwap (Moonbeam)

StellaSwap has proposed that Interlay send INTR tokens from the treasury to the Stellaswap designated address to be used to incentivize the iBTC/GLMR pool on Stellaswap (Moonbeam). Vote here:

Kintsugi Governance

Runtime Upgrade 1.18.0

The Kintsugi network bridge functionality was halted from August 8, 2022, 13.17 UTC to August 9, 2022, 8.39 UTC due to a bug in the 1.18.0 runtime upgrade migration code. We identified the root cause of the issue and proposed a fix to restore the Vaults to their original state via a governance proposal. The bridge faced a downtime but no funds were lost due to the faulty storage migration.

Read the full Post-Mortem:

Web3alert Integration with Kintsugi: Proposal Executed

The proposal from Web3alert.io to maintain a Kintsugi integration for 6 months has been executed. Web3alert allows users to easily set up subscriptions to necessary notifications, and for this purpose, there is already a ready-made tool — Simple mode.

Read the full run-down on the new integration in this post written by Web3alert:

Events

This August, we focused on bringing our global community together through live online events.

To BTC or Not to BTC — is DeFi the question?

We held a Twitter Space with Dan Reecer from Acala Network and Nate Hamilton from Moonbeam to talk about how the Polkadot ecosystem enables the use of Bitcoin across ecosystems with way more DeFi integrations.

Listen to the recording here:

Click the Tweet and then click ‘play recording’ to listen

New Series: The Future of Bitcoin

Innovation of Bitcoin is a key value to the Interlay community, and we found ourselves longing to meet other pioneers breaking through old narratives in Bitcoin. After digging deep (and I mean deep, do people forget that their Twitter likes are publicly visible?) we found an inspiring group of people paving the way for Bitcoin. The narrative around Bitcoin has shifted a lot in recent years, and for some, in an unsavory direction. There is a lot of misinformation about what Bitcoin is and what it’s capable of on a global scale.

We decided to launch the Future of Bitcoin series to create a hub for people doing work across industries, with big ideas, to gather and share. Our goal is to give innovators in the Bitcoin community a platform and a voice. If you’re one of those people, don’t hesitate to slide into our DMs.

The Future of Bitcoin is Radical

Our first space, The Future of Bitcoin is Radical, was nothing short of amazing. We talked about big ideas, and there were many mic drop moments. Our guests were Margot Paez, Climate Physicist and Bitcoin Policy Institute Fellow; Troy Cross, philospher, professor, climate activist, and Bitcoin Policy Institute Fellow; Nate Harmon, Marine Geochemist and co-founder of OceanBit Energy; and Alexei Zamyatin, Interlay Co-Founder, CEO, and Computer Science PhD.

It’s hard to summarize all the incredible conversations that happened in the space, but this quote from Margot Paez does a good job.

“We have been operating in a very old-fashioned old world viewpoint for too long. In a lot of ways, we’re still stuck in the 1800s with fiat. Central banks go even farther back to the 1600s with the bank of England. We need a new way of thinking and the beauty of Bitcoin is that it gives you a new way of thinking about the world.”

Listen to the recording here:

Click the Tweet and then click ‘play recording’ to listen

Bonus: Margot Paez writes incredible work here on Medium under the name Jyn Urso. Here is one of our favorites pieces she’s published:

The Future of Bitcoin is Sustainable

Our next space, The Future of Bitcoin is Sustainable, is scheduled for Thursday, August 25th at 5 pm UTC. We’re bringing Margot Paez back for this conversation along with Alana Mediavilla, documentary filmmaker. She’s currently working on the documentary Dirty Coin, which aims to uncover the truth about the environmental impact of Bitcoin. We’ll also have Justin Ornkey, a long-time Electric Utility Professional who serves on the Satoshi Action Fund Advisory Board. They’ll be joined by Alexei Zamyatin, Interlay Co-Founder, CEO, and Computer Science PhD.

RSVP for the Twitter Space here to get reminders:

Click the Tweet and then click the RSVP Link

Co-Founder and CTO Dominik Harz on The Kusamarian

Recently, Interlay Co-Founder and CTO Dominik Harz was on the Kusamarian, a part of Wag Media, for a fun interview where he chats with Jay about everything from new projects in the Dotsama ecosystem, to what was learned from Kintsugi to make the launch of iBTC so strong. You don’t want to miss it!

Call to Action

Do you want to get involved in the Interlay and Kintsugi world? We don’t blame you, we certainly like it here. Jump into our ecosystem. We’re seeking responses from our community in the following ways:

1. We’re Looking for Vault Operators

Yes, we’re saying it twice. Not to look thirsty, but we’re thirsty. We need more Vault operators since the response from the community has been so strong since launching iBTC, and we rely on the network of decentralized vaults to scale safely, securely, and trustlessly. If you’re on the fence, now is time to jump in. Check out this one-page PDF Onboarding Checklist. If you meet the criteria, fill out this questionnaire. We want to hear from you! If you’d like to learn more about joining our network of Vault operators, you can read up on everything you need to know about Vaults on our docs.

2. Get Involved With Our Innovator Programme

Our new and improved Innovator Programme is up and running. It is a mix of an ambassador and bounty program. You can start by helping out with introductory tasks like educational Twitter threads, and answering questions. As your rank increases, you’ll get access to more advanced bounties, funded by the network treasury after governance approval.

Jump in by joining our Discord server and starting out with intro bounties on Dework.

3. Participate in Governance

You know how people always yell at you to vote during government elections? We do that here, too. To keep Interlay and Kintsugi truly decentralized, community proposals and voting are essential.

Keep tabs on our current actionable governance, vote, or open discussions, visit our governance hubs for Interlay and Kintsugi. Also, join our Discord and Telegram, where we always send governance alerts.

We miss you, Chris Farley

From the Team

Welcome Our New Team Members

Our new Frontend Engineer Simão started off strong. Aside from his excellent work as a frontend developer, he may also be the only Portuguese person who is obsessed with American Football. He’s even visited the states to see his favorite teams play, and has a collection of American Football memorabilia. (Wow, two sports references in one Ecosystem Update, we love a multi-faceted team)

Danilo, the new Head of Growth, jumped in the week of the iBTC launch, which is like battling Giant Bowser in Princess Peach’s Castle before completing the first level of Super Mario. Regardless, Danilo brought years of experience and creativity to the table and jumped right in. And no, this isn’t him writing this, he’s just that awesome.

Closing Thoughts

That was a doozy, and if you’ve made it this far without skimming, you deserve a second cup of coffee.

August was full of the best kind of chaos. We’re proud of our team, and we’re most certainly proud of our community. Your support is unwavering, and we’re growing every day. Get ready to welcome the next generation of innovators seeking interoperability on Bitcoin and beyond.

About Interlay

We envision a future where blockchains seamlessly connect and interact: anyone can use any digital asset on any blockchain, trustless and without limitations. Interlay works with Bitcoin, Ethereum, Polkadot, Cosmos, and others to expand interoperability, capital efficiency, and openness.

Our flagship product is iBTC — Bitcoin on any blockchain. A 1:1 Bitcoin-backed asset, fully collateralized, interoperable, and censorship-resistant, realizing the true free nature of BTC and decentralized finance.

Follow both Interlay and Kintsugi on Twitter, join our Telegram, and hop in our Discord to keep up to date with daily updates from the team.

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Interlay

Interlay allows you to use any asset on any DeFi platform. Fast, secure and trustless.