Ethereum competitor Avalanche announced new support for native bitcoin (BTC) via the Bridge solution built on its crypto wallet Core. Following this news, its native token AVX has outperformed major digital assets such as Bitcoin and Ethereum over the past 24 hours.
BTC wrapped on avalanche
Ava Lab – the foundation behind smart contract platform Avalanche – has launched a new bridge solution that allows users to tokenize their BTC as an avalanche-based asset called btc.b. The newly introduced “wrapped” BTC avalanche could make the DeFi ecosystem available to bitcoin network users. The official blog post states:
“It enables bitcoin holders to access extensive earning and yield opportunities on the top DeFi protocols while maintaining BTC directly on their portfolios.”
The current BTC bridge is only available on Avalanche’s Web3 Wallet Core. The post states that the core Chrome extension is a customized product that supports cross-chain bridging, allowing access to other blockchain-based assets on the Avalanche network.
“The Core Wallet extension was custom built to support bitcoin and Avalanche Bridge and handle the technical problems of connecting bitcoin and EVM chains within a single wallet.”
Just as wrapped BTC – a token type of bitcoin residing on the Ethereum blockchain – was introduced to ETH via smart contracts, Avalanche would also lock each received bitcoin as a deposit and its network corresponded to BTC. Will mine an amount equal to .b. Labs said that Bridge will not expose users to counter-party risk and trust issues as is the case with Ethereum-based wrapped BTC.
In order to bridge BTC to the layer one blockchain, users are required to process two types of fees, which are 1) a BTC network fee and 2) a fee that the bridge charges the user (also known as a bridge toll). ).
According to the post, the bridge will enable bitcoin holders to access the Avalanche subnet and other blockchain networks such as Ethereum.
Avalanche Bridge was launched last year to bridge the asset between Ethereum and the Avalanche Network. Compatible with the Ethereum Virtual Machine (EVM), applications and dapps on Ethereum can be easily transferred to Avalanche. Meanwhile, users can stake Ethereum-based assets on Avalanche’s DeFi protocol to earn yields.
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