decrypt.co
The team behind decentralized Bitcoin infrastructure provider Interlay today unveiled the Minimum Viable Product (MVP) of its BOB ("Build on Bitcoin") solution.
BOB, which comes on the heels of last month’s launch of Interlays’ Bitcoin DeFi Hub, is billed as a Bitcoin Layer-2 network that introduces Rust smart contracts compatible with Bitcoin libraries such as Lightning and Ordinals.
With the full support of the Ethereum Virtual Machine (EVM), the developers see BOB as a go-to platform for fostering innovation, experimentation, and the development of novel decentralized applications atop Bitcoin's robust foundation.
“Our goal is to enable builders to create truly decentralized applications and innovate on top of Bitcoin’s existing stack, including Lightning, Ordinals and Nostr,” Interlay co-founder Alexei Zamyatin said in a statement. “Thereby, BOB bets on enabling builders from Ethereum and other ecosystems to quickly bring their DeFi, NFT and other web3 products to Bitcoin’s 300 million users.”
Interlay, which to date has raised a total of $9.5 million in venture funding, has previously also experimented with tokenized Bitcoin, helping to develop a cross-chain bridge to Polkadot.
The BRC-21 token standard
Notably, the release includes a demonstration application that implements BRC-21, a novel Bitcoin standard proposed by the Interlay team in May this year amid the hype surrounding the sudden emergence of the Ordinals protocol. The latter allows for the inscribing of digital content, such as art, onto the Bitcoin blockchain and uses the BRC-20 token standard.
“BRC-21 is a standard that uses the BRC-20 format of representing assets on Bitcoin to trustlessly bridge tokens from other chains to Bitcoin, for example decentralized stablecoins like DAI that live on Ethereum,” Zamyatin told Decrypt. “On the Bitcoin side, the standard introduces ‘mint’ and ‘redeem’ operations that are verified by customized indexers.”
He further explained that the mint and burn logic of the protocol, paired with the cryptographic verification of Bitcoin transactions, allows any ERC-20 token on Ethereum to be bridged to Bitcoin as a BRC-21 token in a fully trustless manner, without the need for any trusted oracles or custodians.
In addition to Rust and EVM smart contracts, the release of BOB's MVP also features Interlay's trustless Bitcoin bridge and an integrated Bitcoin light client that utilizes cryptographic verification of the Bitcoin main chain.
Zamyatin added that there is also some logic that is necessary on the ‘connected’ chain, such as Ethereum, including "a smart contract to lock/unlock bridged assets and a BTC-Relay—a Bitcoin light client implemented as a smart contract that tracks the BTC main chain and can verify BTC transactions."
According to Interlay, this functionality enables developers to establish trustless BTC, Ordinals, and BRC swaps, along with other Bitcoin primitives like hashrate markets.
The upcoming full-release timeline will incorporate compatibility with Ethereum, an innovative Bitcoin peg mechanism building upon Interlay's existing trustless BTC bridge, and Bitcoin rollup mechanisms.
“We are working to have the mainnet live with launch partners, tooling and infrastructure before the Bitcoin halving. A public testnet for builders to start testing is scheduled for before Christmas this year,” Zamyatin told Decrypt.
Upgrades are ‘necessary’ for mass adoption of Bitcoin
Efforts like Ordinals have raised the ire of some Bitcoin maximalists, who argue that as a tried-and-tested protocol that has been running for over a decade without any major security flaws, the Bitcoin blockchain should not be used for experiments because it could destabilize the network and erode public confidence in the world’s largest cryptocurrency. The Interlay co-founder, however, told Decrypt he firmly believes that we need to unlock more use cases for Bitcoin than just “hodling.”
“If we do not provide people with tools to use Bitcoin for more than investment and remittance in a decentralized manner, we are basically pushing them to use centralized providers or less secure networks,” Zamyatin said. “Financial freedom means different things for different people and I think it is ignorant to claim that ‘stacking sats’ and ‘hodling’ are the sole purposes of Bitcoin.”
According to him, Layer-2s are the most promising path to enable experimentation without major changes to Bitcoin, which should act as the most secure and decentralized settlement layer for applications and layers built around and on top of it.
“The changes necessary to enable trustless Layer-2s need to be carefully evaluated and tested. I am not suggesting to rush an upgrade but an upgrade is definitely necessary if we want to see Bitcoin adopted globally,” argued Zamyatin.
The Interlay co-founder went on to say that he is a Bitcoin “maxi” himself, having spent the last eight years working on Bitcoin.
“I love what Bitcoin is and what it stands for," said Zamyatin, adding that he disagrees with "cult-like maximalism and tribalism."
"I do not believe that Bitcoin ‘is better than everything else at everything,’" he added. "Ignorance is the death of innovation.”
Drawing parallels, he noted that once-dominant corporate giants like IBM, Kodak, Yahoo, Nokia, and Xerox had failed to realize that innovation is needed to survive and paid the ultimate price.
“I and many, many others do not want this to happen to Bitcoin," said Zamyatin. "One could say Bitcoin is in the early stages of a renaissance."