Powpeg, the first bridge

As of today, there are several options for converting BTC into rBTC (Smart Bitcoin) on the Rootstock network and vice versa. But at the beginning, back in 2018, the first bridge between networks was the Powpeg.

Thanks to the Powpeg, you gain access to protocols such as Money On Chain, which offers Bitcoin-collateralized stablecoins, leveraged tokens, and decentralized governance.

In this article, we’ll break down what Powpeg is, how it works, and why it’s a key piece of infrastructure for expanding Bitcoin DeFi or BTCFi.

The original Bitcoin-backed

Decentralized stablecoin →

What is the Powpeg?

The Powpeg is a two-way peg bridge that allows you to lock Bitcoin on the main chain and receive the same amount in rBTC on Rootstock.

Unlike centralized bridges that rely on a single custodian (e.g., a company “holding” your BTC), Powpeg is secured by a decentralized multisignature system known as PowHSMs, managed by independent entities.

Distributed members of the Powpeg federation control these hardware devices, and transactions require multiple signatures, ensuring that no single actor can move the funds.

How does the Powpeg work?

• Deposit BTC: You send your Bitcoin to a multisig address managed by PowHSMs.
• Minting rBTC: Once confirmed, you receive the same amount of rBTC on Rootstock.
• Use in Bitcoin DeFi: With your rBTC, you can interact with DeFi protocols like Money On Chain, Tropykus, and others built on Rootstock.
• Redemption: When you want to go back, you redeem your rBTC and receive the equivalent BTC back on the Bitcoin mainnet.

This process is decentralized and trust-minimized, since the BTC locked in the bridge is secured by a federation of hardware modules plus Bitcoin’s own Proof of Work (PoW).

Security: what makes it unique

Powpeg is not just another bridge. It’s built to be resilient against attacks and offers a security model aligned with Bitcoin itself:

• Merge-mining: Rootstock inherits Bitcoin’s security because miners can validate both chains simultaneously.
• Decentralized custody: No Powpeg member can move funds alone; multisignature signing is required.
• Censorship resistance: Hardware-backed, distributed custody makes it significantly more challenging for regulators or attackers to confiscate funds.

Compared to other crypto bridges, Powpeg prioritizes security and trust minimization, values at the heart of the Bitcoin ethos.

The Powpeg and Money On Chain

Why is the Powpeg important for Money On Chain users?

Because you can convert BTC to rBTC in a decentralized way and in large amounts at low cost, to access the protocol. Remember:

• DOC (Dollar on Chain) is a stablecoin 100% collateralized in Bitcoin.
• BPRO offers hodlers free leverage and rewards.
• MOC is the governance token that drives decentralization of the protocol.

All these tokens operate on Rootstock, and the entry point is rBTC. Powpeg is the essential link that enables Bitcoin-powered DeFi.

Powpeg is more than a technical bridge: it’s the gateway to DeFi on Bitcoin. By combining Bitcoin’s immutability and scarcity with Rootstock’s smart contract capabilities, it enables projects like Money On Chain to offer stablecoins and financial tools in a fully decentralized way.

Try the Powpeg

To use the Powpeg, go to https://powpeg.rootstock.io/ and click on Accept Terms & Conditions. Then, choose the card you want, either from BTC to RBTC or from RBTC to BTC.

Visit the Money On Chain Wiki to view the entire process: 2 Way Peg App | Money On Chain.

To dive deeper, check out:

• Understanding Money On Chain in depth
• What is a stablecoin, and why learn about collateral first
  

If you’re already a Bitcoiner, the next step might be to try rBTC and explore what Powpeg and Rootstock can unlock for you.