Avalanche, a famous ETH competitor, has announced support for Bitcoin via its bridge solution. This solution is built on the platform’s cryptocurrency wallet core.
The purpose of the bridge is to connect BTC users to various Avalanche-based DeFi platforms. Examples of these platforms include TraderJoe and Platypus.
Meanwhile, the news caused the price of the platform’s token, AVX, to spike. In the last 24 hours, AVX has outperformed major digital currencies such as BTC and ETH.
Wrapped Bitcoin Now Available On Avalanche
Ava Lab, the company behind Avalanche, recently released a bridge solution. This new function would allow customers to tokenize their Bitcoin as a BTC.b.
Also, this BTC.b is an Avalanche-based digital asset. Additionally, the new wrapped Bitcoin could bring more BTC users to Avalanche’s DeFi ecosystem.
The post on the company’s official blog stated that:
“This would enable Bitcoin users to access extensive yield and earning opportunities on DeFi platforms. Also, they would still have Bitcoin on their wallet portfolio.”
Unfortunately, the Bitcoin bridge is available only on the Web3 wallet core of Avalanche. The post said that this core extension could support cross-chain bridging.
As a result, users can access other blockchain-based digital assets on Avalanche’s network. This would make the platform attractive to more users.
Avalanche customized the web3 wallet core to support BTC and the new bridge. Before now, ETH-based wrapped Bitcoin could be transferred to ETH using smart contracts.
This is how Avalanche would lock received BTC as a deposit. Afterward, it would mint BTC.b, which is equivalent to the amount of Bitcoin received.
Moreover, the platform noted the bridge would be very secure and not expose users to risks. It even stated that it does not have the risk issues of ETH-based wrapped Bitcoin.
Avalanche Cross-Chain Bridge
For a user to bridge Bitcoin to a layer one blockchain, it involves some fees. There are two fees that the user must process. The first is the Bitcoin network fee, while the second is the Bridge Toll.
This Bridge Toll is the fee charged by the bridge. As stated by the post, this bridge would give BTC holders diverse access. Examples include access to blockchain networks such as Ethereum and Avalanche subnets.
It was in 2022 that Avalanche launched its bridge. The aim was to bridge digital assets between Avalanche and Ethereum networks. Also, the bridge is compatible with Ethereum’s Virtual Machine.
Therefore, users can transfer Dapps and applications on Ethereum to Avalanche easily. In addition, user can stake their ETH-based assets on Avalanche’s protocol to receive earning yields.