Interlay 2.0 Roadmap

From Bridge to Bitcoin DeFi Hub

Over the past 3 years, Interlay has built the bedrock infrastructure to use BTC on other chains without the need to rely on centralized entities. Interlay’s Bitcoin-backed asset, iBTC, offers a trustless and decentralized way to use Bitcoin in DeFi. The current soBTC crisis on Solana and the hasty sunsetting of renBTC on Ethereum are evidence that a 100% decentralized approach is the only way forward. The reliance on centralized wrapped assets is a risk not only to users but to entire ecosystems in crypto. Therefore, Interlay will continue to expand on this front.

From Bridge to BTC DeFi Hub

With the iBTC bridge operational and DeFi integrations live on numerous chains, the next step is to expand focus to products and user experience.

The main problem with multi-chain is that going from one chain to another is slow, expensive, and complicated. To make matters worse, specialized AMMs and liquidity protocols are often too complex for the majority of users, each looking and functioning differently. For DeFi to reach mass adoption, it will have to become much more accessible and easy to use.

That’s why, over the next few months, Interlay will transform into a one-stop shop for Bitcoin finance.

Users will be able to lend, borrow and trade their BTC using a simple interface that will offer one-click strategies and a fast on/off-boarding experience from fiat and other blockchain networks.

A preview of the Bitcoin DeFi hub

In more detail, the Interlay network will feature an AMM-based decentralized exchange (Uniswap v2 with Curve-style stableswaps) and a liquidity protocol enabling lending and borrowing (Compound v2-style). On top, a layer of APIs and user interfaces will allow anyone to wrap complex strategies into one-click transactions.

New Website, Early Access, and Innovator Program

With the updated vision comes an updated website — Keep an eye out for more content as we release more and more features.

For the innovators and early adopters: sign up for early access and be the first to try out Interlay’s new hub of Bitcoin Defi products (sooner than you might expect!)

Want to get involved?

Help build the first true BTC DeFi experience, unlocking Bitcoin’s full potential as a global digital asset and protecting users from centralized intermediaries. Join the Interlay innovator program, help educate and build, and claim grants from the network treasury!

Innovations Coming to the BTC Bridge v2

Interlay will also bring two key advancements for bridging. On the BTC bridge, Vaults will be split into operators maintaining technical infrastructure and delegators providing capital. This unlocks new synergies between technical operators and capital providers, allowing both to participate in securing the bridge while focusing on what they do best.

Another scalability improvement is moving to a capacity-based fee model, which better incentivizes Vaults to keep increasing the amount of iBTC that can be minted by users.

Reminder: Vault revenue is composed of volume-based bridging fees (mint and redeem) and block rewards in the native INTR token, as operational subsidy while bridge revenue is growing.

Most significantly, Vaults will be able to re-use the collateral that secures the bridge to supply liquidity to Interlay’s lending and AMM protocols, earning income from both protocols and hence greatly increasing the capital efficiency of the system.

INTRnomics 2.0

The DAO will reach economic sustainability by receiving a percentage of fees generated across all protocols (AMM, lending, bridge) as well as transaction fees on Interlay and cross-chain iBTC transfers. The more BTC volume the Interlay network can generate (on Interlay and other chains), the more revenue will flow to operators, LPs, and the DAO.

A new shareholder model will be proposed, where stakeholder groups (bridge operators, AMM LPs, lenders/borrowers, vINTR stakers, and governance participants) continuously vote on the distribution of protocol revenue and how the treasury spends funding, including liquidity bootstrapping.

These updates make governance and stakeholder participation much more dynamic and assign even greater importance to vINTR in the economic steering of the protocol.

6 Month Roadmap

Development of the new features is already underway, with the first upgrades being available for community review and voting already this year:

Q4 2022

• Lending live on Kintsugi testnet
• DEX launched on Kintsugi testnet
• Updates to Vault economics on Kintsugi and Interlay
• Capacity model update for vaults on Kintsugi

Q1 2023

• Capacity model update for Vaults on Interlay
• Lending protocol ready to launch on Kintsugi
• DEX ready to launch on Kintsugi
• 5th security audit
• Lending ready to launch on Interlay
• DEX ready to launch on Interlay
• Operator-Delegator Model ready for Kintsugi
• Operator-Delegator Model ready for Interlay

Q2 2023

• Governance updates ready for both Kintsugi and Interlay

Long-Term Vision

With a $400 billion market cap and 300 million users worldwide, Bitcoin is the #1 crypto asset across first crypto users, professional investors, and experienced users alike. While the BTC DeFi hub addresses the needs of DeFi users, an even simpler solution is needed to reach the millions of BTC holders who don’t actively participate in trading.

Interlay will bring BTC to the masses by building a mobile-first, non-custodial BTC savings account, using novel bridging technology. The first part — the fundamentals — were already published in a technical paper earlier this year.

In addition, Interlay expects that decentralized bridge protocols using bi-directional light clients that rely on cryptographic verification of blockchain state rather than trusted intermediaries will become dominant over the next 5 years. Such protocols include XCM used to connect Polkadot and Kusama parachains, IBC used between Cosmos SDK chains, and Snowbridge which connects Substrate to Ethereum-like chains.

As a consequence, the Interlay network will continue to expand to more XCM channels as well as integrate other networks via light-client bridges towards Cosmos (IBC), Ethereum (Snowfork), and others. The cross-chain expansion will follow a simple playbook: support the favorite wallet and transaction fee asset natively on the Interlay chain, and make native L1 assets available as iBTC bridge collateral and across Interlay’s DeFi products.

Next Step: 2.0 White Paper

A new white paper providing an in-depth overview of the Interlay 2.0 architecture will be released in early December. Follow Interlay on Twitter and be the first to hear when it’s live.

Questions and Feedback

If you have any questions about the future of Interlay, feel free to ask questions on Discord or join our next community call on Wednesday, November 30th at 12 noon EST | 5 pm UTC | 6 pm CEST. It will take place on the community call stage in our Discord.

About Interlay

Interlay is building the safest and easiest way to use Bitcoin in decentralized finance. Access true DeFi for Bitcoin with our one-stop shop for all things BTC finance, including trading, lending, and staking. Enter the interoperable cryptoverse with Bitcoin using iBTC, a decentralized 1:1 Bitcoin-backed asset for the multi-chain ecosystem. Interlay’s mission is simple: to accelerate Bitcoin mass adoption by providing the necessary, trust-free (financial) infrastructure and products.

Stay updated by following us on Twitter, joining our Discord where we have fortnightly community calls that you can participate in, and jumping into our Announcements and Community channels on Telegram. For announcements on our canary network, Kintsugi, follow our Kintsugi Twitter account.