Interlay, a polkadot-based cross-chain interoperability project, is building infrastructure for decentralized financial apps that run on different blockchains.
The interoperability start-up, which is building infrastructure for decentralized finance applications across major blockchains such as Ethereum, Cosmos, and Polkadot, received $6.5 million in funding from investors led by DFG Capital.
Interlay will use the latest funding to expand its operations and bring more developers on board with its open-source platform, according to the release. DFG Founder and CEO James Wo said in a statement that Interlay’s solution will “expand the cross-chain possibilities for Bitcoin.”
Users can store Bitcoin on a decentralized network of collateralized vaults that connects Bitcoin and Polkadot. Users can then create interBTC, a Bitcoin-pegged token that can be used in the Polkadot ecosystem. InterBTC can be used as collateral for DeFi financing and other operations like yield farming.
Interlay intends to connect DeFi platforms like Polkadot and Ethereum with cryptocurrencies like Bitcoin (BTC). The company’s core product, InterBTC, is a Bitcoin-backed asset that is entirely crypto-based. It acts as an algorithmic stablecoin that can be fully redeemed for Bitcoin and is backed by numerous collaterals.
According to the announcement, the Web3 Foundation, which is behind the Polkadot project, gave the initial funding to begin development in 2019, with the goal of using Bitcoin’s liquidity to push the DeFi ecosystem’s growth. Over the next eight months, Interlay plans to double its employees. Currently, it employs 15 full-time staff and has over 100 community ambassadors.
Defi interoperability is viewed as a critical milestone in the ecosystem’s evolution and could pave the path for wider adoption. Throughout 2021, the DeFi industry has thrived, with the total value of all DeFi protocols topping $270 billion in early November, owing to a strong rally in cryptocurrency markets.
As DeFi becomes more prevalent, privacy is becoming a more pressing concern. Privacy solutions have been developed by some blockchain initiatives. Interlay has always followed the DeFi path, focusing on security and decentralisation, as well as cryptography and incentives.