Craig Wright is at it again and Bitcoin Cash ABC is back in the limelight this week with 100% gains. Something no one saw coming and I’d be surprised if it lasted. Less surprising was Dogecoin, Shiba Inu and artificially inflated Internet Computer, following behind with some nice little 50% bumps. Continuing with our trend this month of moving into projects outside of Ethereum is a promising new layer-2 DeFi application for Bitcoin called Sovryn Protocol.
Introduction
Made by Bitcoiners for Bitcoin, Sovryn is an on-chain decentralized protocol that utilizes a Bitcoin sidechain Rootstock (RSK) to bridge Bitcoin with everything else DeFi to allow Bitcoin lending and margin trading. Sovryn is controlled solely by its community and stakeholders with no single company, organization or individual that represents or controls the protocol. Sovryn’s Bitcoin-native protocol advances financial sovereignty in a way that aligns with Satoshi Nakamoto’s vision of a trustless, censorship-resistant, and peer-to-peer system of money. DeFi protocols built on Ethereum use governance models that advance decentralization, but they also introduce risks such as the threat of speculative attacks. RSK is a Bitcoin layer 2 sidechain that provides for smart contract functionality using Bitcoin as its native asset. The founding team created the platform by expanding on proven technological advancements from Ethereum-based DeFi applications while improving on the known risk elements. The end result is a self-sustaining platform for trading, leveraging, and lending that runs on this Bitcoin sidechain, with incentives for long-term growth hard-coded in. As written by its creators: Ethereum is simply the testnet for Sovryn, a tool used to increase Bitcoins digital defense by splicing the code from existing dapps and improving on them. Sovryn lives and breathes with the true intentions of Cypherpunks to write code, share code, review code, and copy code.
Sovryn uses governance enforced by Bitcoin PoW. This Bitcoin native mode of governance is called a “Bitocracy”, which gives weighted voting rights to participants based on how much skin in the game they have while aligning the incentives of all participants. Only stakers receive voting rights and they stake for three-year periods, during which liquidity is suspended, removing the arbitrage opportunities that lead to abuses of the system. This immense lock-up of capital gives incredible advantages to the Sovryn protocol’s ability for growth. Encompasses a self-running, decentralized business where users interact with the Bitcoin blockchain with complete financial sovereignty, enjoying Bitcoin-class security and long-term incentives to act in beneficial ways towards the protocol. Sovryn uses a quadratic equation with mapping systems to measure the total amounts of tokens that are unstaked on any given day. This enables the protocol to compute the voting power of all the tokens staked up to a given moment. Fee distributions from the trading platform, which could range from BTC to stablecoins, are automatically paid out to SOV stakers in direct relation to the weighting of their staked tokens. Pro-rata preference is given to holders with the longest outstanding staking periods. Staking SOV is a feature that is permissionless and openly available to anyone. The difference from other DeFi protocols here is…
Hi! My name is Lark Davis!
I’m a cryptocurrency investor with years of experience and I’ve been making consistent profits in the crypto space.
I’m passionate about helping others do the same, so I run multiple educational channels on crypto investing.
