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On Bitcoin, users can submit requests for cross-chain transfers and exchanges. To lock their assets on Bitcoin, they send them to multisig accounts called Lockers. Smart contracts on Polygon monitor the activities of the Lockers, and if they act maliciously, they can be slashed.
Nodes called Teleporters collect users' requests from Bitcoin, provide inclusion proof for them, and submit them to Polygon. The TeleportDAO bridge checks the validity of the submitted proof, and if the proof is valid, TeleSwap smart contracts execute the requests.
To execute cross-chain requests, users must wait for their request to be finalized on Bitcoin. However, for those who want their assets instantly, there is the Teleportation mechanism. TeleSwap utilizes two types of pools in this mechanism: instant pool and collateral pool. The instant pool is a single asset pool from which users can borrow teleBTC. To borrow from the instant pool, users must deposit sufficient collateral in the collateral pools.
TeleSwap has a well-designed incentive mechanism to encourage collaboration among all participants, including Lockers, Teleporters, and instant pool providers. The entire design is fully decentralized and trustless, meaning that anyone can become a node in the system and that nodes' activities are verified by smart contracts.