‘No Bridges or Wrappers’ — dWallet and Avail are Building Native Bitcoin Wrappers
Bitcoin (BTC) users will soon be able to access smart contract functionality without the need to link, store or manage their BTC through a new integration between dWallet Network and Avail.
The partnership allows for the first time DWallet smart contracts built on Avail's data availability solution to create Bitcoin signatures while fully controlling the user's BTC.
Speaking to Cointelegraph, dWallet co-founder and CEO Omer Sadika said the Bitcoin package solution will interact with native BTC without any bridges or wraps.
“On-chain solutions like Bridge or Federated MPC are broken because users have to sacrifice ownership to use their BTC. Because ownership is transferred, a collision or hack can easily destroy assets. This issue has already stolen billions of dollars.”
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Sadika added that the Bitcoin community has been highly critical of Bitcoin wrappers, or “layer-2s”, where many solutions have been hacked for “connection fraud” by linking or bundling users with other tokens.
Jameson Loup, co-founder and chief technology officer of Bitcoin watchdog Casa, recently noted that around 30 Bitcoin layer-2 protocols are being tested.
It's a reality that Sadika aims to address by teaming up with Avail. dWallets claims to enable programmable native BTC where user signatures are cryptographically required.
“All existing Bitcoin rolls or L2s are using cross-chain solutions like bridging or federated MPC, violating the most sacred right of Web3 – and especially Bitcoiners – user ownership.”
Multiparty Computation (MPC) is an integral part of this task. MPC is a set of cryptographic protocols that allow multiple parties to compute a task together without revealing their resources to others.
According to Sadika, a wallet running on the decentralized MPC dWallet Network can enable Bitcoin transactions. To do this, the smart contract on the Avail rollup is required to approve the transaction as well as the user signing for the Bitcoin transaction.
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It explains that the smart contract on the Avail rollup can execute any logic, including retention, exchange, lending or sharing. Sadika adds that the user's participation is confidential and guarantees that no one can join or break and steal the user's property.
“DWallet's creation of a Bitcoin signature means that the logic is applied to the native BTC on Bitcoin and does not use a representation of BTC, as with bundled tokens.”
The partnership promises to use DWallet's MPC infrastructure to create native wallets to expand Bitcoin's capabilities. Sadika says this allows smart contracts to run any logic and use native BTC as part of a smart contract without linking or using tokens.
“So any DeFi [decentralized finance] Protocols like swaps or loans can now use native BTC. Other use cases like native BTC, DAOs [decentralized autonomous organizations] Controlling native BTC, regular portfolio trading or gaming can now include native BTC, Sadika added.
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Avail founder Anurag Arjun added that allowing BTC to be used programmatically on other blockchains in a trust-less approach is a new approach to driving Bitcoin adoption.
“Bitcoin represents an excellent base layer in terms of data availability with high security in the ecosystem,” Arjun said.
DWallet's technology allows Solidity smart contracts on the Avail package to create Bitcoin signatures and allow developers to manage dWallet.
Meanwhile, dWallet Network enforces approval from the Avail rollup smart contract for logical execution, requiring users to complete the signature to prevent impersonation and asset theft.
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