Nomic, a layer-1 bridging solution for Bitcoin, is set to introduce Bitcoin liquidity to the Cosmos network via a Bitcoin-backed token. The team behind Nomic plans to implement a significant upgrade called the “nBTC Interchain Upgrade” on the Nomic layer-1 blockchain by the end of October, marking the launch of this innovative token.

The nBTC token will assume the role of a native token within the Cosmos ecosystem and will be transferable utilizing the Interchain Blockchain Communication (IBC) protocol. Following the upgrade, the Nomic app and Nomic-integrated Cosmos applications like Osmosis, a decentralized exchange, will facilitate the issuance and redemption of nBTC tokens in exchange for Bitcoin.

The blockchain upgrade is slated for October 27, with activation anticipated by October 30. Turbofish’s CEO, Matt Bell, the driving force behind Nomic’s development, unveiled the project during the Cosmoverse conference held in Turkey today.

Matt Bell expressed his excitement about the project, stating, “Nomic will now unlock the exciting DeFi capabilities of the Cosmos ecosystem for any user holding BTC.”

This development is poised to address the liquidity challenge within the Cosmos ecosystem, which has been in search of a primary store of value. Sunny Aggarwal, co-founder of Osmosis, emphasized the significance of Nomic, stating that it will help make the much-anticipated union of Bitcoin-centric Cosmos a reality.

It is worth noting that concerns have arisen regarding bridging protocols and security, with cross-chain bridges accounting for 37% of the cumulative amount lost in crypto hacks since 2016, according to DeFiLlama data. However, Matt 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 held in a “reserve output” on the Bitcoin blockchain. Funds are released when transactions are signed by Nomic validators, reducing the risk of Bitcoin loss in case of issues.

In addition to Bitcoin, various blockchain teams, including Noble and Celesta, are actively working on launching native USDC tokens in the Cosmos ecosystem to enhance DeFi liquidity.

By Impact Lab