Question 1

interBTC vs. wBTC: which is better for DeFi?

Accepted Answer

interBTC offers a decentralized, trust-minimized bridge based on XCLAIM with integrated DeFi protocols, while wBTC is a centralized custodial solution on Ethereum. Choose interBTC for full decentralization within Substrate, but it requires more setup complexity.

Question 2

How to set up a local interBTC development node?

Accepted Answer

Use Docker with the provided image or compile from source using Rust, as described in the README under 'Running' and 'Development node'. For example, run 'docker run --network=host interlayhq/interbtc:1.25.0-rc5 --dev --instant-seal' for a quick start.

Question 3

Is interBTC secure for handling Bitcoin?

Accepted Answer

Yes, it uses a collateralized system with vaults and slashing, and is based on XCLAIM for trustless bridging. However, security depends on proper setup, network participation, and the underlying Substrate parachain security model.

Question 4

What DeFi protocols does interBTC support?

Accepted Answer

It includes AMMs similar to Uniswap v2 and Curve v1, and a lending market like Compound v2, all built with Rust smart contracts in the crates folder, such as dex-general, dex-stable, and loans.

Question 5

Can I use interBTC with Ethereum smart contracts?

Accepted Answer

Yes, through EVM-compatible smart contracts and bridges, as mentioned in the key features. However, it primarily operates within the Substrate ecosystem, so integration requires cross-chain tooling.

Question 6

How does interBTC handle Bitcoin transaction verification?

Accepted Answer

It uses a stateful SPV client in the btc-relay crate to store Bitcoin chain data, track forks, and verify Merkle proofs, ensuring secure bridging without relying on centralized entities.

interBTC

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