🟩Protocol overview

The TeleSwap protocol comprises five main components: TeleSwap contract, Locker, Teleporter, TeleportDAO Bitcoin bridge, and AMM DEX. These components together enable the bridging of Bitcoin assets (BTC and BRC-20s) to EVM chains to obtain wrapped assets, as well as bridging back the wrapped assets from EVM chains to Bitcoin to acquire native Bitcoin assets. Users can also trade between Bitcoin assets and ERC-20 tokens.

How can you move your Bitcoin assets to EVMs?

Say you want to move your native BTC to Ethereum. You initiate the process by submitting a wrap request on Bitcoin, sending your BTC to a Locker, and including your recipient address along with other necessary information in the Bitcoin transaction. Once this transaction receives four confirmations on the Bitcoin chain, a Teleporter node collects it and submits it to the TeleSwap contract for processing. At this stage, the Teleporter generates proof of your transaction's inclusion on Bitcoin. This proof is then verified by TeleportDAO bridge to ensure the transaction's validity. The TeleSwap contract extracts the required information from your request, such as the amount of BTC sent and the recipient address, then mints wrapped BTC and sends it to your recipient address. Additionally, a portion of the minted BTC is deducted as a fee and sent to the Locker and the treasury of TeleSwap.

How can you redeem your native Bitcoin assets?

Now, suppose you want to unwrap your wrapped BTC to get native BTC. Here, you send an unwrap request to the TeleSwap contract, specifying your recipient address and which Locker should handle your request. The contract then burns your wrapped BTC, taking a portion as a fee for the Locker and treasury. The assigned Locker is responsible for sending your native BTC to your recipient address. After sending, the Locker submits this transaction along with an inclusion proof to the TeleSwap contract. The contract verifies the proof's validity using the TeleportDAO bridge. If everything checks out, the contract marks your request as processed. However, if your request hasn't been processed by a deadline, you can call the contract to dispute the Locker's negligence. In such a case, the contract will deduct the Locker's collateral and transfer the slashed collateral to you.

How you can buy Bitcoin assets or sell them?

Trading Bitcoin assets with ERC-20s is facilitated by the bridging protocol. Suppose you want to sell your native BTC for USDC on Ethereum. You initiate an exchange request on Bitcoin by sending your BTC to a Locker and including the required information such as the output token, minimum received amount, and recipient address. This request undergoes processing similar to a wrap request. However, instead of sending wrapped BTC to your recipient address, the wrapped BTC is exchanged using an AMM DEX for your requested token. If the exchanged amount exceeds the determined minimum amount, you will receive the exchange assets; otherwise, the wrapped BTC is sent to your address. Also, to buy native BTC from Ethereum using USDC, your USDC is first exchanged for wrapped BTC through an AMM DEX, and then the wrapped BTC is redeemed for native BTC.