Ren, a decentralized Ethereum-based financial protocol that enables blockchain liquidity between chains in the financial sector, partnered with Acala Network (a cross-chain stablecoin platform operated by Polkadot) to investigate redeemable BTC tokens. Currently, Polkadot is the latest blockchain platform to announce redeemable tokens for Bitcoin.
The Ren team has worked with the Acala network for a while and it was the only proof of concept Polkadot has ever done. Therefore, this cooperation is a step forward on the way to cross-chain DeFi travel (decentralized financing) to enable value transfers between blockchains without permission.
Via Ren’s mainnet, RenVM, the DeFi protocol has supported assets such as BCH, BTC, and ZEC to drive Ethereum’s DeFi use cases. With this collaboration, the Web3 community of both the Ren platform and the Acala network operated by Polkadot can easily access the DeFi platform.
Bringing the redeemable Bitcoin tokens into the Polkadot ecosystem offers token holders countless opportunities. Ren’s CEO Mr. Taiyang Zhang spoke about this initiative, saying:
Once the PolkaBTC token is created, users can use the new token across the Polkadot blockchain network, and any PolkaDot BTC holder can redeem it for actual bitcoins at any time.
However, until recently, there weren’t any DeFi products willing to use PolkaBTC tokens for lending or collateral purposes. With this collaboration, RenBTC can now be used as collateral for a US credit facility. This Ren-Acala partnership also offers other opportunities as the RenBTC tokens can now be traded on the Acala network for other assets such as ACA, DOT, LDOT and XBTC besides BCH, BTC and ZEC.
In addition, RenBTC users can now take part in proof-of-stake validation and get huge returns on investment by trading DOT assets. The RenBTC tokens have also been integrated as native transaction fee tokens. New holders of RenBTC tokens can trade on the Acala network by paying the fees using the RenBTC tokens. This makes RenBTC a more powerful cross-chain DeFi product on the Acala platform.
RenVM provides the BTC gateway and will pave the way to increase bitcoin usage on the Acala network. So, rather than building a separate blockchain on the Acala network, it is much better to invest in building a multi-chain polkadot ecosystem on the Acala network that will open the way for a new era of cross-chain interoperability.
Users can experience the benefits of the REN-Acala integration with the third season of the Acala Mandala Festival, which is scheduled to begin on Monday July 27th. There will be a cross-chain trading competition where users can mint the RenBTC tokens through DeX. The initial coin fees for RenBTC tokens on the Acala platform are waived, which is an added benefit for the new Ren users.