At 9:44 p.m. yesterday, the candle period for the 10th parachain slot auction on the Polkadot network ended. Interlay won Polkadot’s 10th parachain slot auction at 23:35 on February 24 with 2,751,900 DOT locked.
What kind of network is Interlay?
The main function of Interlay is to allow users to invest, earn and pay with BTC on any blockchain. Users can mint interBTC on Interlay for use on various networks.
interBTC is Interlay’s flagship product that brings Bitcoin to any blockchain. It is a fully-collateralized, interoperable and censorship-resistant asset 1:1 by Bitcoin. interBTC will join Polkadot as a parallel link to Cosmos, Ethereum and other major DeFi networks. interBTC is fully collateralized, interoperable and censorship resistant.
From these functions, Interlay is like a bridge, but it mainly completes BTC assets. From the perspective of the central role of the network, Interlay will radiate other networks.
The technical principle of Interlay comes from XCLAIM, which is an efficient cross-chain exchange framework for encrypted assets without trust. XCLAIM allows the creation of assets 1:1 backed by existing cryptocurrencies without trusting a central operator. The framework is broadly applicable to cryptocurrencies.
XCLAIM introduces three protocols to achieve decentralized, transparent, consistent, atomic, and censorship-resistant cross-blockchain exchanges. Take the following Bitcoin and Ethereum examples:
Goal: Create a Bitcoin token on Ethereum.
Swap: Swap Bitcoin tokens on Ethereum with ETH or any ERC-20 token.
Exchange: Burn Bitcoin tokens on Ethereum and get 1:1 amount of Bitcoin in return,
The XCLAIM prototype is ERC20 compliant. An overview of the protocol is as follows:
What makes interBTC unique is its strict commitment to trustlessness and decentralization. In a multi-collateral system inspired by MakerDAO, Vault locks collateral on interBTC parachains in various digital assets. If Vault misbehaves, their collateral is slashed and users are compensated. As a user, you just need to trust that Bitcoin and the DeFi platform you use are safe.
As a holder of interBTC, it is guaranteed: you can always exchange interBTC for BTC, or get your collateralized currency repayment at a preferential rate. In Vault’s misconduct, users can be compensated from Vault’s collateral, which will also back DOT in the future. In the medium and long term, it will also expand to stablecoins or token sets to improve stability.
The design of interBTC emphasizes being open and permissionless. Therefore, any user can assume multiple roles at the same time and can also leave the system at any time. Users can choose:
Vaults are collateral intermediaries that lock BTC on Bitcoin. Any user can become a Vault by simply locking up DOT collateral. The requirements are (1) a Bitcoin full node, (2) a Polkadot account and (3) acceptable liquidity of collateral assets.
There are two types of users on parachains. Liquidity Providers: Lock BTC using Vaults to mint 1:1 backed interBTC on parachains. Requires (1) a Bitcoin wallet and (2) a Polkadot wallet.
End User: Obtain interBTC from liquidity providers on Polkadot and use interBTC for payments and applications. Request a Polkadot wallet
The transaction collection and production of the Interlay parachain is maintained, verified by the verification of the Polkadot relay chain as proof of security. This is a Polkadot role.
To protect users from BTC theft and loss, Vaults must use parachains to lock collateral, and make the value of the locked collateral higher than the value of the BTC locked by the Vault. To ensure that Vaults have no incentive to steal users’ BTC, Vaults provide collateral for whitelisted assets following a process similar to MakerDAO. In order to mitigate exchange rate fluctuations, interBTC adopts over-collateralization and multi-level mortgage balancing scheme.
Vault operators are free to choose any collateral asset that is in the protocol governance whitelist to lock. Each Vault is then associated with a specific collateral asset, and a single operator can maintain an unlimited number of Vaults. Each collateralized asset currency has a threshold set by governance that determines how much of it can be locked up as collateral in the system. Once this threshold is reached, new Vaults must pick from other collateral assets, or require protocol governance to raise the threshold.
For users, the distinction between collateral only makes sense when exchanging interBTC for BTC. Users can select specific vault(s) for the redemption process and be compensated in the collateral of these specific vaults in the event of failure.
In the event of stolen BTC, inability to execute exchange requests, or severe shortage of collateral, Vaults may be liquidated, i.e. their collateral will be reduced and used to rebalance the system or compensate users.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/who-is-interlay-who-just-won-the-slot-auction/
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