We are pleased to share our progress on the cross-chain bridge between Bitcoin Cash and smartBCH. With the help from BCH community, smartBCH's developers have proposed a cross-chain mechanism named SHA-Gate which transfers BCH between the Bitcoin Cash main chain and a sidechain. It is decentralized, non-custodian, miner-supervised and fully implemented with Bitcoin Cash's script bytecode. It does not require any consensus change of Bitcoin Cash, nor rely on operators' honesty for asset security.
The developers are now busy in studying feasibility and safety of SHA-Gate, with coding and implementation followed soon. We invite the BCH community to help us review and refine SHA-Gate. Before SHA-Gate is ready for deployment, smartBCH will use a semi-centralized bridge operated by CoinFLEX.
CoinFLEX is delivering a semi-centralised Gateway v1 utilising its existing system for multi-chain coin rebalancing designed for FLEX Coin and flexUSD.
The solution, tried and tested by CoinFLEX since Oct 2020 will allow CoinFLEX users to deposit BCH on the Bitcoin Cash network and withdraw on smartBCH and reverse.
In the background, the multisig smartBCH authority guarding the full supply of smartBCH BCH will be monitoring the demand for smartBCH signalled by CoinFLEX and release the required BCH amounts on smartBCH network into the circulation, while CoinFLEX locks the matching amount of BCH on the Bitcoin Cash network into a publicly visible Treasury Wallet containing the BCH removed from the circulation. The Treasury Wallet is secured by Fireblocks multilayer technology utilising MPC cryptography with hardware isolation. All operations powered by Fireblocks are covered by their at rest & in transit insurance.
At all times, it will be possible to verify the BCH rebalancing on both blockchains by checking the BCH balance in the Bitcoin Cash Treasury Wallet vs BCH balance change in the smartBCH source wallet.
Detailed user guides of SHA-Gate and CoinFLEX's bridge will be delivered soon.