Osmosis, the largest decentralized exchange (DEX) on Cosmos, has announced plans to bring Bitcoin (BTC) to the inter-blockchain communications (IBC) protocol. Alongside Nomic and Kujira, Osmosis aims to enable the transfer of Bitcoin to the Cosmos network.
During the Cosmoverse 2023 Conference on October 3, Osmosis revealed that users will be able to transfer Bitcoin to the Cosmos network through its Nomic bridge. This transfer will come at a cost of 1.5% of the transaction value. In return, users will receive Nomic Bitcoin (nBTC), an IBC-compatible token issued by Nomic Chain, on a one-to-one basis. These nBTC tokens can be bought, sold, used to provide liquidity on Osmosis, and are usable across more than 50 Cosmos-linked app chains.
The release of the nBTC Interchain Upgrade is scheduled for October 27, with activation expected on October 30. Through a partnership with decentralized finance protocol Kujira, users can send BTC to Kujira’s Sonar wallet address for self-custody of their nBTC tokens. The same seed phrases can be used to restore users’ BTC and nBTC wallets. Furthermore, nBTC can act as collateral to mint Kujira’s native stablecoin USK and can be utilized for borrowing and lending within the ecosystem. Users will also have the opportunity to bid for liquidated nBTC collaterals.
During the initial stages of nBTC’s launch, there will be a hard cap of 21 Bitcoins for the cross-chain bridge. Once this cap is reached, applications will no longer be able to generate deposit addresses, and users will be unable to deposit more BTC. This parameter will be governed by Nomic DAO governance in a future upgrade.
The introduction of Bitcoin to the Cosmos network via Osmosis, Nomic, and Kujira represents a significant development for the inter-blockchain communications protocol. It expands the possibilities for Bitcoin holders to utilize their assets within the Cosmos ecosystem and opens up access to a wide range of decentralized finance services and applications.
As the cryptocurrency market continues to evolve, interoperability between different blockchain networks becomes increasingly important. The integration of Bitcoin into the Cosmos network demonstrates the potential for interoperability and collaboration between different blockchain platforms, paving the way for a more connected and efficient decentralized finance ecosystem.
Overall, the addition of Bitcoin to the Cosmos network through Osmosis, Nomic, and Kujira is a significant step towards broader adoption and utilization of cryptocurrencies within the decentralized finance space. It not only showcases the capabilities of the Cosmos ecosystem but also highlights the potential for collaboration and innovation in the growing field of decentralized finance.