Nomic to Enable Bitcoin Liquidity on Cosmos with nBTC Token
Nomic, a layer-1 bridging solution for Bitcoin, is introducing a Bitcoin-backed token called nBTC to enable Bitcoin liquidity on the Cosmos ecosystem. The team behind Nomic plans to implement an upgrade, known as the nBTC Interchain Upgrade, to the Nomic layer-1 blockchain by the end of October. This upgrade will facilitate the issuance and redemption of nBTC for Bitcoin through the Interchain Blockchain Communication (IBC) protocol. The blockchain upgrade is scheduled for October 27, with activation expected by October 30.
Turbofish’s CEO Matt Bell unveiled the Nomic project at the Cosmoverse conference in Turkey, highlighting its potential to unlock DeFi capabilities within the Cosmos ecosystem for Bitcoin holders. Sunny Aggarwal, co-founder of Osmosis, a decentralized exchange integrated with Nomic, stated that this development addresses the liquidity problem faced by Cosmos and brings together a Bitcoin-centric Cosmos.
Concerns about Cross-Chain Bridges
There have been concerns regarding cross-chain bridges due to the high number of hacks resulting in significant losses. However, Bell assured that Nomic is fully decentralized and non-custodial, making it a unique Bitcoin bridge. Unlike other bridging protocols, Bitcoin on Nomic is not locked but instead held in a reserve output on the Bitcoin blockchain. Funds are released when transactions are signed by Nomic validators, reducing the risk of losing Bitcoin through emergency disbursals.
In addition to Nomic, other blockchain projects like Noble and Celesta are also working towards launching native USDC in the Cosmos ecosystem to enhance its DeFi liquidity.
Hot Take: Unlocking Liquidity Potential with nBTC Token
The introduction of the nBTC token through the Nomic upgrade brings exciting DeFi capabilities to the Cosmos ecosystem for Bitcoin holders. This move addresses the liquidity problem faced by Cosmos and establishes a Bitcoin-centric ecosystem within Cosmos. By enabling the issuance and redemption of nBTC for Bitcoin, Nomic offers a bridge between these two prominent cryptocurrencies. The decentralized and non-custodial nature of Nomic provides reassurance to users, as funds are held securely in a reserve output on the Bitcoin blockchain. With this development, Cosmos takes a significant step towards enhancing its DeFi liquidity.
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