— Algorand (@Algorand) May 31, 2022
- Bitcoin can be used on Algorand thanks to pNetwork
- What is pNetwork
Bitcoin can be used on Algorand thanks to pNetwork
The pNetwork bridges allow the creation of tokens that can be exchanged on par with cryptocurrencies residing on other blockchains.
In this specific case, these are tokens created and hosted on Algorand‘s blockchain, but exchangeable 1:1 with native BTC on Bitcoin’s blockchain.
The new token is called pBTC and is actually already present not only on Algorand but also on other blockchains, such as Ethereum, Polygon, Arbitrum, BSC, EOS, Telos and XDAI.
For every pBTC token issued, there is one BTC locked in pNetwork’s reserves, so that at any time it is possible to return 1 pBTC and get 1 BTC in exchange.
Besides pBTC, pNetwork has also created other cross-chain tokens, such as pETH, pUSDT, pUSDC, pLTC, pDOGE, etc.
Back in 2021, pNetwork and Algorand announced a partnership to bring cross-chain tokens to Algorand, and just yesterday the protocol was launched.
This protocol will allow Algorand users to use native tokens from Ethereum, Binance Smart Chain, Polygon and other blockchains in the future. For now, the only one actually launched is pBTC.
What is pNetwork
pNetwork currently supports 15 different blockchains, including some Layer 2-based ecosystems such as Polygon.
The pBTC bridge on Algorand is already active and provides a very simple interface to exchange BTC with pBTC, and vice versa. Once pBTC are received on Algorand, they are usable in all dApps based on this blockchain.
The launch of the cross-chain bridge between Algorand and Ethereum is also planned shortly.
The goal of pNetwork is to connect all major crypto networks in this way, so that users can transfer cash and assets seamlessly between different crypto ecosystems.
The Algorand network in particular has been growing a lot recently in terms of the development of new dApps and services.
However, in the DeFi sphere, for example, it is still only in its infancy, with a TVL of only $150 million, which places it in 30th place among blockchains with DeFi protocols. It is possible that the use of pTokens could push the expansion of the use of DeFi protocols on Algorand, as this allows for the use of widely used cryptocurrencies such as BTC and ETH.
It is worth noting that the price of ALGO, Algorand’s native cryptocurrency, has been falling almost constantly since September last year. Moreover, to date it has lost 88% of its value from its peak in June 2019.
In particular, it has lost 32% in the last 30 days, despite some good news that could potentially have made it recover. However, the collapse of the crypto market concomitant with the implosion of Terra has interrupted this short-lived growth phase.