What Is Kintsugi BTC(KBTC)
Kintsugi is a decentralized network dedicated to connecting crypto-currencies like Bitcoin with DeFi platforms like Polkadot and Ethereum. The Interlay network is hosted as a Polkadot parachain and will be connected to Cosmos, Ethereum and other major DeFi networks. Read more about Interlay’s vision of blockchain interoperability.
Kintsugi Coin is Interlay’s canary network, an experiment with real economic value deployed on Kusama. They and Interlay share the same code base – with the difference that Kintsugi focusses strictly on innovation and will always be ahead in terms of features.
Kintsugi Storage Key Points
|Source Code||Click Here To View Source Code|
|Explorers||Click Here To View Explorers|
|Twitter Page||Click Here To Visit Twitter Group|
|Whitepaper||Click Here To View|
|Official Project Website||Click Here To Visit Project Website|
interBTC: Bitcoin on Any Blockchain
interBTC is a 1:1 Bitcoin backed asset that can be used to invest, earn and pay with BTC across the DeFi ecosystem on Polkadot, Ethereum, Cosmos and many more.
While interBTC exists, BTC held locked by collateralized Vaults on Bitcoin – individuals or service providers who
- (1) receive BTC into custody for safekeeping while interBTC exists,
- (2) lock collateral in a MakerDAO-inspired multi-collateral system to protect users against theft and loss of BTC.
- Lock: Lock your BTC with a Vault. Pick one, or run your own. Your BTC is always safe and insured by Vault collateral.
- Mint: Get interBTC at a 1:1 ration to your locked BTC.
- BTC DeFi: Earn on your Bitcoin. Use interBTC as collateral, for lending, yield farming and more. On Polkadot, Kusama, Cosmos, Ethereum and other major DeFi platforms.
- Redeem: Redeem interBTC for actual BTC on Bitcoin – trustless and anytime you want.
What makes Kintsugi Coin unique is the strict dedication to being trustless and decentralized.
- Secured by Insurance. Vaults lock collateral on the interBTC parachain in various digital assets – in a MakerDAO-inspired multi-collateral system. If Vaults misbehave, their collateral is slashed and users reimbursed. As a user, you only trust that Bitcoin and the DeFi platform you use are secure.
- Radically Open. Anyone can become a Vault and help secure interBTC, anytime. Yes, you can run your own Vault!
The design of Kintsugi Coin has an emphasis on being open and permissionless. As such, any user can take up multiple roles at the same — but also leave the system whenever they wish. As such, to participate, you can choose from:
Vaults: collateralized intermediaries who hold BTC locked on Bitcoin. Any user can become a Vault by simply locking DOT collateral. The requirements are (1) a Bitcoin full node, (2) a Polkadot account and (3) liquidity in accepted collateral assets.
Users: there are two types of user on the BTC Parachain:
- Liquidity Providers lock BTC with Vaults to mint 1:1 backed interBTC on the Parachain. Requirement: (1) Bitcoin wallet and (2) Polkadot wallet.
- End-Users obtain interBTC from liquidity providers on Polkadot and use interBTC for payments and with applications. Requirements: Polkadot wallet.
Lock BTC to mint interBTC
A user (liquidity provider) mints new interBTC.
- A Vault locks DOT as collateral with the Kintsugi Coin bridge (the Interlay BTC Parachain).
- A user creates an issue request with a collateralized Vault of his choosing. This reserves the Vault’s DOT collateral.
- The user then sends BTC to the Vault.
- The user proofs to the interBTC bridge that they sent the BTC to the vault (using a transaction inclusion proof against the BTC Relay).
- Upon successful verification of the proof, the user mints interBTC and receives the tokens to his or her account balance.
Redeem interBTC for BTC
A user redeems interBTC for the equivalent amount of BTC or receives DOT as reimbursement.
- To request a redeem, a user locks interBTC with the interBTC bridge (Interlay BTC Parachain).
- The Parachain instructs a Vault to execute the redeem.
- Kintsugi Coin Vault transfers the correct amount of BTC to the user.
- To unlock the DOT collateral, the Vault submits a transaction inclusion proof to BTC-Relay.
- If the proof is correct, the Parachain releases the Vault’s DOTs.
- If no valid proof is provided on time, the Parachain slashes the Vault’s DOTs and reimburses the user at a beneficial exchange rate.
Vault operators can freely choose to lock collateral in any of the assets whitelisted by protocol governance. Each Vault is then associated with one specific collateral asset – and a single operator can maintain an unlimited amount of Vaults. Each collateral asset currency has a governance-set threshold determining how much of it can be locked as collateral in the system. Once this threshold is reached, new Vaults must pick from other collateral assets, or request to increase the threshold with protocol governance.
For users, the distinction between collaterals only becomes relevant when redeeming Kintsugi Coin for BTC. Users can pick specific Vaults (one or multiple) for the redeem process – and are reimbursed in these specific Vault’s collateral in case of failure.