Consider two different use cases.
Alice, a bitcoin hodler, wants to put her BTC stack to work by lending BTC 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 and more features, and they can provide greater functionality for both their users and those of Sovryn.
A centralized company, such as BitMEX or Binance, requires you to deposit your bitcoin with 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 of sad examples of abuse and neglect of custodied assets by centralized organizations, and Sovryn wants to provide an alternative.
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.
KYC stands for Know Your Customer. It is a set of requirements often imposed by government regulation that forces financial institutions to gather detailed identifying information about you before they will allow you to use their services. KYC eliminates privacy, equips autocratic government policies to control people through their finances, and assumes people are guilty until proven innocent. It also increases the cost of doing business and shuts out poorer and marginalized people whose business isn't worth the cost of compliance. KYC is part of a larger regulatory practice called KYC/AML (Anti-Money-Laundering). See There's a Bigger Scam Than Anything in Crypto, It's Called KYC/AML for more details on this practice.
Sovryn is built on the Rootstock (RSK) platform, a Bitcoin sidechain that is compatible with the Ethereum Virtual Machine (EVM). EVM compatibility allows RSK to support smart contracts that run the Sovryn 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 the native asset. RSK is the most permissionless and censorship-resistant Bitcoin sidechain:
RBTC is the BTC-pegged native token of RSK, the network on which Sovryn is built. RSK (Rootstock) is a Bitcoin sidechain secured by the Bitcoin network. RBTC is an exact 1:1 peg with BTC. (1 RBTC = 1 BTC) When you transfer bitcoin into RSK, your bitcoin is locked and the equivalent amount released as RBTC on RSK. Using RBTC, you can lend, borrow, and trade on Sovryn. In addition, all fees are paid in RBTC, so you don't need a separate asset just for transaction fees. You can convert your BTC to RBTC for use on the Sovryn platform using the FastBTC Relay.
RBTC is Bitcoin on steroids. It enables your Bitcoin to interact with a range of services on Bitcoin layer 2 (on the RSK Bitcoin sidechain) and brings extra security, alongside permissionless transfers.
You will need RBTC for any transaction on Sovryn. This includes trading, staking, or sending SOV, the governance tokens of Sovryn. You can convert your BTC to RBTC for use on the Sovryn platform using the FastBTC Relay.
RSK has a number of efficiencies over Ethereum, primarily with regards to storage handling and data structure. However, we 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:
Yes, the Sovryn protocol smart contracts are periodically assessed by independent security auditors. Here you can see the Audits.
RBTC can be withdrawn from the portfolio page on the dapp. At present, the maximum that can be withdrawn this way at one time is 0.1. This will be increased over time. At this moment the peg-out is not as fast as the peg-in.
The only fully trustless way to do the Peg-Out is by the RSK 2-way-peg protocol, which we describe in step-by-step detail in RBTC to BTC Conversion (Peg-Out). You can also use Liquality's Atomic Swaps.
You can convert your tokens from RSK to Ethereum and vice versa using the RSK Tokenbridge.