RSK has a number of efficiencies over Ethereum, primarily with regards to storage handling and data structure (more info here). Sovryn however do not believe that these represent an order of magnitude difference. The main benefit in terms of scaling for RSK, is its ability to adopt those scaling solutions that prove viable in the future on Ethereum (rollups for instance). They have said that “Ethereum is our testnet” – and this is one reflection of that.
Sovryn Key Information
|Presale Start Date||TBD|
|Presale End Date||TBD|
|Token Type||Governance token, on RSK|
|Initial Token Price||1 token = 1 USD|
|Accepts||USDT BTC ETH|
|Whitepaper||Click Here For View Whitepaper|
|Website||Click Here For Visit ICO Homepage|
The Game Change Team Behind Sovryn
This is what you can do with Sovryn today:
- Spot-Exchange – a low cost, low-slippage, AMM allowing instant trades between tokens.
- Margin Trading – Creates up to 5X long/short trades, allowing users to borrow leverage from the lending pool.
- Lending Pool – Allows HODLers to earn interest by lending tokens to margin traders and borrowers.
- FastBTC Relay – Allows use of Bitcoin almost instantly with smart contracts and decentralized products, from any Bitcoin wallet.
Sovryn will continue to add features and additional functionality for users. Over the next few months, you will be able to:
- Borrow – Allows users and smart contracts to borrow tokens from the lending pool. All lending is over-collateralized.
- Perpetual Swaps – BTC backed perpetual swaps allowing trades with up to 20X leverage.
- Bitcoin-backed Stablecoin – users can use a USD-pegged token, backed by overcollaterilzed Bitcoin.
Stacking Sats and HyperHODLing
Alice, a hodler, wants to put her BTC stack to work by lending them to a margin trade. Bob, a trader, is so bullish, he isn’t satisfied just to HODL. He wants to HyperHODL. He opens a long position on BTC, borrowing the funds from Alice. Sovryn and Bob do not want to move their BTC onto a centralized service and give up control of their keys.
Using Sovryn, Alice issues a peer to peer loan straight from her wallet and Bob trades straight from his. Alice is now stacking sats, and Bob is HyperHodling without compromising their privacy, control or ideals.
How is Bitcoin on RSK different from Bitcoin on Ethereum?
- RSK is not a competing chain, it is Bitcoin Layer 2.
- RSK is Bitcoin native. You don’t need any other token other than bitcoin to use it and all fees are paid in bitcoin. This is the first DeFi dApp where Bitcoin is the only “gas” you need to power it. This reduces the user friction of buying an altcoin so you can trade another.
- RSK is non-custodial. It is not an IOU (like WBTC) and maintains censorship- resistance. tBTC is also non custodial, but is very expensive to make the conversion – and is likely to get more expensive in their new model (higher collateralization ratios). More generally, fees are much lower on RSK than on Ethereum.
- RSK is secured by Bitcoin PoW, no need to understand or trust a different model. No need to be concerned that Bitcoin value on Ethereum could exceed ETH value.
- BTC has the advantage of being the base asset on RSK. The loan to collateral ratios Sovryn will offer will be far superior to what is being offered for tokenized Bitcoin on Ethereum.
- With the FastBTC relay, it is faster, cheaper and easier to move Bitcoin onto RSK than any of the Ethereum BTC-tokens. This alone is a 10X improvement. This will also be integrated with the lightning network, which is important to many Bitcoiners.
Is the FastBTC Relay centralized?
It is indeed centralized right now. This will change soon as we add a federation and then further steps to decentralize it. In particular they will be linking it with lightning network, so that transfers can happen instantaneously. Sovryn require at least one confirmation for all transactions. For most transaction sizes, even this is overkill. For very large transactions, they will require more confirmations on a risk-adjusted basis. Only the very largest transactions would require more than 3 confirmations.
Fees collected by LPs
Liquidity Providers can provide liquidity to the Sovryn Swap AMM. Unlike most other AMM’s, such as Uniswap, LP’s are not required to deposit both assets into a pool, they can add only one or both. Sovryn Swap uses oracles to rebase the ratio between tokens, eliminating most of the possibility for “impermanent loss”.
Sovryn Swap collects a fee on each side of the swap, which is distributed to the LPs. Currently this fee is set at: 0.1%. Interest payments made by borrowers are distributed to lenders. The Sovryn Protocol collects 10% of interest for the insurance fund, which exists to protect lenders in the possible case of a loan defaulting.
What is margin trading?
Margin trading has two main aspects: trading with leverage and shorting. In trading with leverage, a trader borrows assets to increase the amount of assets they are trading. By doing so, they magnify the gains or losses of their trade. The borrowed assets are known as a margin loan. To obtain the margin loan, the trader puts up assets that serve as collateral. The terms of the margin loan specify a collateral-to-loan ratio.
If the trade falls below the specified ratio, the trade is liquidated and the lender is made whole using the trader’s collateral. Margin trading also includes shorting. In shorting, a trader essentially sells assets they do not own. The short investor borrows an asset and sells it on the expectation that the assets will lose value.
What does non-custodial and permissionless mean?
Sovryn does not require you to send your Bitcoin to a centralized company, like BitMEX or Binance, in order to trade. With Sovryn, you send your BTC to a smart contract that allows you to keep custody of your private keys, allowing you to withdraw your funds at any time. Sovryn is permissionless in the sense that no one can censor a transaction, ban your account or require you to undergo KYC before trading.