Sushi, a prominent decentralized finance (DeFi) platform, has partnered with ZetaChain, an interoperability platform, to pioneer native Bitcoin (BTC) swaps across 30 blockchain networks. This collaboration aims to facilitate BTC trading in a decentralized and permissionless manner without the need for wrapping BTC on other blockchains.
The integration will encompass Sushi's v2 and v3 automated market makers and SushiXSwap, its cross-chain swap feature. ZetaChain's core contributor Ankur Nandwani expressed that this partnership could significantly expand Bitcoin's reach within the DeFi sector in a native format. He highlighted existing examples like THORChain, which trades Bitcoin natively with other chain assets, and mentioned that ZetaChain's approach allows for the development of Bitcoin-interoperable decentralized applications (DApps) capable of native transaction settlement.
ZetaChain has already demonstrated the technology's viability on a testnet and aims to further establish its utility with the upcoming launch of its mainnet, partnering with SushiSwap and other DeFi protocols. Jared Grey, Sushi's head chef, lauded the integration as a significant advancement for DeFi, describing the capability for native Bitcoin swaps as a game-changer for the industry.
Sushi's integration with ZetaChain will occur in two phases. The first phase involves introducing a decentralized exchange (DEX) on ZetaChain's testnet to support basic asset swaps and liquidity provision, including beta testing and application incentives. In the second phase, upon the deployment of ZetaChain's mainnet, Sushi will become one of the launch partners, enabling full Bitcoin interoperability.
The technical process involves deploying a cross-chain swap contract on ZetaChain's Ethereum Virtual Machine. This omnichain contract allows value transfer from any connected chain, including Bitcoin. The process involves sending a Bitcoin transaction with a special memo to a Threshold Signature Scheme (TSS) address owned by ZetaChain validators. The validators lock the transferred BTC and, upon enough votes, create an inbound cross-chain transaction, converting the BTC to ZRC-20 BTC. This ZRC-20 BTC is then swapped for another ZRC-20 token, like ZRC-20 ETH, and withdrawn to the destination chain.
This partnership marks a significant stride in bridging Bitcoin with the broader DeFi ecosystem, potentially unlocking new use cases and enhancing the sector's appeal to Bitcoin users.
Disclaimer: Please note that the information provided in this article is based on the referenced research articles. It is essential to conduct further research and analysis before making any investment decisions. The cryptocurrency market is highly volatile, and investors should exercise caution and consult with financial professionals before engaging in cryptocurrency trading or investment activities.