Let’s use two examples to describe different use cases.
Alice, a bitcoin 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. Alice and Bob do not want to move their BTC onto a centralized service and give up control of their keys or privacy. Using Sovryn, Alice issues a peer to peer loan straight from her wallet and Bob trades straight from his wallet. Alice is now stacking sats because she is getting paid interest. Bob is HyperHodling BTC. Both can do this without compromising their privacy, control or ideals.
Carol is building a centralized exchange. David is building a decentralized hedging Dapp. Both Carol and David can integrate permissionlessly with the trading, lending and liquidity of Sovryn. In doing so, they gain instant access to more liquidity, more features and can provide greater functionality for both their users and those of Sovryn.
A centralized company, such as BitMEX and Binance, require you to send your Bitcoin over to them in order to trade. Even though you get a password to your account, this does not mean that you have direct control over your Bitcoin in their wallet. History is full with centralized abuses and Sovryn does not like that. Sovryn does not require you to send your Bitcoin to a centralized company in order to trade, lend or swap. With Sovryn, you send your Bitcoin 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. You are Sovryn.
Sovryn is built on the Rootstock(RSK) platform, which is a Bitcoin sidechain compatible with the Ethereum Virtual Machine that can support the smart contracts protocol. If you wish to learn more about RSK click here.
RSK is a Bitcoin layer 2 sidechain that provides for smart contract functionality using Bitcoin as it’s native asset. RSK is the most permissionless and censorship-resistant Bitcoin sidechain:
RSK is permissionless and its consensus mechanism is merge-mined PoW with about 40% of Bitcoin’s hashpower currently mining RSK. This means that RSK is mined by more hashpower than any other chain, except Bitcoin itself.
RSK’s two-way peg mechanism (called PoWpeg) is probably the most secure peg based on a multisig system, in the cryptoworld. It uses a combination of HSMs and SPV proofs with multiple different functionaries. It layers PoW (through SPV proofs) over HSM security, providing additive security and decentralization. Unlike Liquid, it is permissionless and highly censorship resistant.
RSK sidechain is constantly improving the two-way peg. In the next iteration, Bitcoin miners will directly participate, making the peg even less federated and even more tightly coupled with Bitcoin PoW.
RSK has a number of efficiencies over Ethereum, primarily with regards to storage handling and data structure. We 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). We have said that “Ethereum is our testnet” - and this is one reflection of that. To learn more about RSK we suggest the following links:
Bitcoin on RSK has decisive advantages over tokenized Bitcoin on Ethereum (such as wBTC, renBTC):
To summarize, the main two differences between WBTC and RSK/RBTC are:
WBTC is centralized. WBTC holders are fullying trusting BitGo to secure the BTC held in custody, honor redemption requests, and to not freeze their WBTC tokens. RBTC on the other hand is backed by BTC held in a federated 8-of-15 multisig, which is secured by hardware security modules run by 15 different bitcoin businesses. Assuming these hardware security modules work as advertised, RBTC should always be redeemable as long as 8-of-15 modules are online, and RBTC cannot be arbitrarily frozen.
WBTC is a token issued on Ethereum. Fees on Ethereum are ultimately paid in ETH and support Ethereum miners, who are also the source of security on Ethereum (until Eth2 when Ethereum switches to PoS). RBTC on the other hand is issued on RSK, a bitcoin sidechain that is merge-mined with bitcoin proof of work. Fees on RSK are paid in RBTC and support bitcoin miners, so the more transaction fee volume there is on RSK the more secure both RSK and bitcoin become (since more fees = more incentive to mine = more security). If you hold BTC, all else being equal you should prefer to use a chain that supports bitcoin miners instead of one that doesn't so that your BTC is more secure.
Yes, there were two sales in the past.
Yes, the Sovryn protocol smart contracts are periodically assessed by independent security auditors. Here you can see the Audits.
You can convert your tokens from RSK to Ethereum and vice versa using the RSK Tokenbridge.