Osmosis Introduces Bitcoin to Cosmos via IBC Protocol

Together with Nomic and Kujira, Osmosis, the largest decentralized exchange (DEX) on Cosmos, will introduce Bitcoin to the namesake inter-blockchain communications (IBC) protocol.

According to an announcement made at the Cosmoverse 2023 Conference on October 3, users can transmit Bitcoin to the Cosmos network using Osmosis’ Nomic Bridge for 1.5% of the transaction value.

The user will then receive one Nomic Bitcoin (nBTC), an IBC-compatible token issued by Nomic Chain. On Osmosis, the nBTC can be purchased, sold, and used to provide liquidity. They are also applicable across more than 50 Cosmos-linked app chains.

“Bitcoin is in deep need of an application DeFi ecosystem, and Cosmos is in need of a base money asset that can serve as its primary store of value. Nomic will help make this long-awaited union for a Bitcoin-centric Cosmos a reality.”

“The Cosmos ecosystem is too important for it to lack a seamless and secure way to receive BTC,” said Sunny Aggarwal, co-founder of Osmosis. Matt Bell, CEO of Turbofish and a core contributor to Nomic, agreed.

He continued, “We view today’s announcement as the beginning of the most seamless and secure way to onboard users into the Cosmos ecosystem using BTC.” The nBTC Interchain Upgrade is scheduled for dissemination on October 27 and activation on October 30.

Through a distinct partnership with the decentralized finance protocol Kujira, users can self-custody their nBTC by sending BTC to Kujira’s Sonar wallet address. Users’ BTC and nBTC addresses can be restored using the same seed phrases.

The nBTC can also be used as collateral for minting Kujira’s native stablecoin, USK, and for lending and borrowing within the ecosystem. In addition, users can bid on nBTC collateral that has been liquidated.

In the early phases of nBTC’s launch, according to Nomic’s developers, there will be a hard cap of 21 BTCs for the cross-chain bridge.

“When the bridge reaches its maximum capacity, applications will no longer be able to generate deposit addresses, and users will be unable to deposit additional BTC.

In a forthcoming upgrade, this parameter will be managed by Nomic DAO governance,” developers wrote.