Interlay excels at providing a Bitcoin-native, IBC-enabled asset through its overcollateralized vault system. It leverages the security of Polkadot's parachain architecture, offering a high degree of sovereignty and composability within its ecosystem. For example, iBTC can be used natively on Polkadot parachains like Moonbeam and Acala, and its TVL in vaults has consistently exceeded $10M, demonstrating robust economic security for the minted assets.
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Comparisons
Interlay (Bitcoin DeFi) vs tBTC v2 for Cross-Chain Bitcoin
A technical analysis comparing the decentralized Bitcoin bridges Interlay and tBTC v2, focusing on collateralization, security models, and suitability for Real-World Asset (RWA) tokenization and DeFi collateral.
Chainscore © 2026
introduction
THE ANALYSIS
Introduction: The Battle for Decentralized Bitcoin in DeFi
A technical comparison of Interlay's iBTC and tBTC v2, the leading protocols for bringing native Bitcoin liquidity to DeFi.
tBTC v2 takes a different approach by utilizing a randomized, permissionless signer group secured by Ethereum staking. This design, powered by the Threshold Network, eliminates centralized custodians and aims for maximal decentralization and censorship resistance. This results in a trade-off: while arguably more trust-minimized in its operator set, its integration is primarily Ethereum-centric, and minting fees are subject to Ethereum's gas price volatility.
The key trade-off: If your priority is multi-chain interoperability (especially within the Polkadot/Kusama ecosystems) and predictable, low minting fees, choose Interlay. If you prioritize maximum decentralization aligned with Ethereum's security model and deep integration within the EVM DeFi stack (like Aave or Compound), choose tBTC v2.
tldr-summary
Interlay vs tBTC v2
TL;DR: Core Differentiators at a Glance
Key strengths and trade-offs at a glance for two leading cross-chain Bitcoin solutions.
01
Interlay's Strength: Native Bitcoin Integration
Uses a true Bitcoin bridge: iBTC is a 1:1 Bitcoin-backed asset secured by the Interlay parachain on Polkadot via over-collateralization and a decentralized vault network. This matters for users prioritizing sovereignty and a non-custodial model that doesn't rely on a third-party federation.
02
Interlay's Strength: DeFi Ecosystem Play
Built for a multi-chain DeFi hub: iBTC is natively integrated into the Polkadot and Kusama ecosystems (e.g., Acala, Moonbeam). This matters for protocols seeking composability with a wide range of parachain-based DeFi apps like lending (Acala), DEXs (ArthSwap), and yield strategies.
03
tBTC v2's Strength: Ethereum-Native Efficiency
Optimized for Ethereum DeFi: tBTC is an ERC-20 token minted via a permissionless, optimistic minting system with a 6-of-10 threshold signature group. This matters for teams who need deep liquidity and immediate integration with the existing Ethereum stack (Curve, Aave, Uniswap V3) and Layer 2s.
04
tBTC v2's Strength: Lower Friction & Cost
Simplified user experience: Minting and redeeming tBTC involves fewer steps and lower gas costs compared to over-collateralized models. This matters for retail users and high-frequency protocols where minimizing transaction friction and capital lock-up is critical.
INTERLAY VS TBTC V2
Head-to-Head Feature Comparison
Direct comparison of technical and economic models for cross-chain Bitcoin solutions.
| Metric | Interlay | tBTC v2 |
|---|---|---|
Underlying Security Model | Overcollateralized (150%+) with native token (INTR) | Overcollateralized (150%+) with ETH/stETH |
Bridge Architecture | Parachain on Polkadot, Sovereign Vaults | Threshold Network (ECDSA), Decentralized Signers |
Mint/Redemption Fee | 0.5% (variable) | 0.05% (minimum) |
Supported Destination Chains | Polkadot, Kusama, Ethereum, Moonbeam | Ethereum, Arbitrum, Optimism, Base, Polygon |
Time to Mint iBTC/tBTC | ~1 hour (Parachain finality + Bitcoin confirmations) | ~3 hours (Ethereum + Bitcoin confirmations) |
Native Governance Token | ||
Direct Bitcoin Backing | true (1:1 in Vaults) | true (1:1 in Threshold Network) |
pros-cons-a
PROS AND CONS
Interlay (iBTC) vs tBTC v2: Cross-Chain Bitcoin Analysis
A data-driven comparison of two leading decentralized Bitcoin bridges. Key metrics and architectural trade-offs for CTOs and Protocol Architects.
01
Interlay (iBTC) Pro: Native Polkadot Security
Architectural advantage: iBTC is secured by the Polkadot Relay Chain via a dedicated parachain. This leverages Polkadot's shared security model (~$12B staked) and governance. This matters for protocols requiring regulatory clarity and institutional-grade slashing guarantees, as the security is not dependent on a standalone validator set.
02
Interlay (iBTC) Con: Ecosystem Lock-in & Liquidity
Primary trade-off: iBTC is optimized for the Polkadot/Substrate ecosystem (e.g., Moonbeam, Acala). While bridged to Ethereum via Axelar/Gravity Bridge, its deepest liquidity and native integrations are within Polkadot. This matters if your primary deployment is on Ethereum L2s (Arbitrum, Optimism) or Solana, where tBTC's direct Ethereum peg and broader EVM integrations may be superior.
03
tBTC v2 Pro: Permissionless & EVM-Native Design
Decentralization advantage: tBTC v2 uses a randomized, permissionless signer group backed by ETH staking (via Threshold Network). No KYC for minting. This matters for DeFi purists and applications prioritizing censorship resistance. Its design is inherently Ethereum-centric, offering seamless integration with MakerDAO, Aave, and Uniswap V3 for deep, native liquidity.
04
tBTC v2 Con: Ethereum-Centric Risk & Complexity
Systemic risk: tBTC's security is coupled to Ethereum's consensus and the health of its ETH-staked signer ecosystem. It introduces smart contract risk on Ethereum and complexity from multi-party computations. This matters if you seek security isolation from Ethereum's congestion or potential consensus bugs, or require a bridge native to non-EVM chains like Cosmos or Polkadot.
pros-cons-b
CROSS-CHAIN BITCOIN DECISION MATRIX
tBTC v2 vs Interlay: Pros and Cons
Key architectural and economic trade-offs for choosing a Bitcoin bridge. Based on current TVL, security models, and protocol activity.
01
tBTC v2: Superior Ethereum Composability
Native ERC-20 on Ethereum: Seamlessly integrates with the largest DeFi ecosystem (Uniswap, Aave, Compound). This matters for protocols needing deep liquidity and established tooling (like MetaMask, Etherscan).
$200M+
Historical TVL Peak
03
Interlay: Native Polkadot Parachain Security
Shared Polkadot Security: Inherits finality and consensus from the Polkadot Relay Chain. This matters for builders who prioritize a sovereign, Bitcoin-focused appchain with integrated governance (XCM).
~12 sec
Block Time
05
tBTC v2: Higher Gas Cost & Latency
Ethereum L1 Dependency: Mint/redeem transactions incur high base-layer gas fees and are subject to Ethereum congestion. This matters for users making frequent, small transactions.
06
Interlay: Lower Mainstream Liquidity
Polkadot Ecosystem Focus: iBTC has less integration outside the Polkadot/ Kusama ecosystems (e.g., fewer CEX listings, DEX pools). This matters for projects targeting users primarily on Ethereum or Solana.
CHOOSE YOUR PRIORITY
Decision Framework: When to Choose Which Bridge
Interlay (iBTC) for DeFi
Verdict: The integrated DeFi hub. Choose for native Bitcoin yield and composability within its ecosystem. Strengths: iBTC is a canonical wrapped asset on Polkadot/Interlay, enabling direct use in its native lending (Interlay Lending), DEX (Acala, Moonbeam integrations), and money markets. It offers programmable Bitcoin for complex DeFi strategies without leaving the Polkadot ecosystem. TVL is concentrated and purpose-built. Weaknesses: Ecosystem is Polkadot-centric; moving iBTC to Ethereum or other major L1s requires an additional hop via XCMP bridges, adding latency and complexity.
tBTC v2 for DeFi
Verdict: The canonical Ethereum plug-in. Choose for maximum liquidity and integration with the established Ethereum DeFi stack. Strengths: tBTC is native to Ethereum, designed as the go-to wrapper for protocols like MakerDAO, Aave, and Uniswap. It leverages a decentralized signer network (Threshold Network) for minting. Its strength is seamless integration into the largest DeFi TVL environment, offering the deepest liquidity pools and most battle-tested smart contract interactions. Weaknesses: Subject to Ethereum mainnet gas fees for minting/redemption, which can be prohibitive for small amounts. The bridge is specifically Ethereum<->Bitcoin.
INTERLAY VS TBTC V2
Technical Deep Dive: Security and Redemption Mechanisms
A critical comparison of the security models and redemption processes for the two leading cross-chain Bitcoin solutions, focusing on trade-offs between decentralization, speed, and capital efficiency for CTOs and architects.
tBTC v2 is more decentralized in its core security model. It uses a permissionless, overcollateralized network of signers (the Threshold Network) secured by staked T tokens. Interlay, while having a decentralized governance token (INTR), relies on a permissioned set of Vaults and a trusted Oracle (Bitcoin SPV) for its primary security, creating a more federated model for the Bitcoin peg.
verdict
THE ANALYSIS
Final Verdict and Strategic Recommendation
Choosing between Interlay and tBTC v2 hinges on your protocol's core need for sovereign security versus seamless Ethereum composability.
Interlay excels at providing a sovereign, Bitcoin-secured environment because it deploys its own blockchain secured by the Bitcoin network via its novel BTC Parachain on Polkadot. This creates a dedicated DeFi hub for Bitcoin with native assets like iBTC and INTR, independent of Ethereum's congestion and fee market. For example, its architecture supports direct, non-custodial minting of iBTC with a current TVL anchored directly to Bitcoin's security, offering a unique value proposition for protocols wanting to build a full-stack Bitcoin DeFi ecosystem.
tBTC v2 takes a different approach by being a pure, lightweight bridge to Ethereum. Its strategy leverages a decentralized signer network and optimized smart contracts on Ethereum mainnet and L2s like Arbitrum and Optimism. This results in the trade-off of inheriting Ethereum's security and broad composability but also its gas fee volatility and dependency on Ethereum's consensus. tBTC's design prioritizes seamless integration into the massive Ethereum DeFi landscape, with over $100M in TVL across its deployments, making wrapped BTC instantly usable in protocols like Aave, Uniswap, and Curve.
The key trade-off: If your priority is building a dedicated, Bitcoin-centric application with its own economic and security model, choose Interlay. Its parachain offers tailored governance and a fee structure decoupled from Ethereum. If you prioritize maximizing immediate liquidity and composability within the established Ethereum/EVML2 ecosystem, choose tBTC v2. Its design as a minimal bridge ensures your users can leverage the deepest pools and most mature DeFi tooling with minimal friction.
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