Interlay introduce XCC protocol to enhance Bitcoin’s reciprocal relationship with DeFi

cointelegraph.com:

Interoperability network Interlay has released a 21-page technical whitepaper, titled XCC: Theft-Resilient and Collateral-Optimized Cryptocurrency-Backed Assets, advocating for the imminent development of cross-blockchain interoperability solutions to unlock a plethora of potential within the decentralized finance (DeFi) ecosystem.

As a Polkadot parachain, Interlay is focusing its efforts on opening pathways of communication and interaction between Bitcoin’s currency-native ecosystem, with the wider functionalities of the DeFi space with networks such as Ethereum and Polkadot.

The newly-launched XCC protocol — serving as an additional layer of XCLAIM which was introduced to the market in 2018 — enables greater asset sovereignty during cross-chain activities such as wrapping, as well as unifying Bitcoin multisigs with mechanisms typically native to the Ethereum network such as commit chains.

To uphold the purported benefits of risk aversion and capital efficiency, the XCC asset will only be available within curated DeFi applications, however, users have the freedom to transition to the interBTC product if they require greater flexibility. Both services will exist in tandem with each other, expanding the capabilities of Bitcoin’s DeFi market to a wider consumer audience.

According to their assessment, XCC allows for “any Bitcoin that is staked long-term and is not intended to be moved can essentially ‘release’ its collateral”, and that this can then be “reused to secure other, ‘liquid’ BTC being bridged… allowing for vaults to serve more users with the same collateral.”

Interlay co-founder & CEO, Alexei Zamyatin, shared his vision for the future of XCC both in terms of decentralized adoption, as well as a security