Sovryn Decentralized Bitcoin Trading & Lending Platform Review

What is Sovryn?

Sovryn is a non-custodial, permissionless system that utilizes smart contracts for activities such as bitcoin lending, borrowing, and margin trading.

Sovryn is also a decentralized autonomous organization (DAO) established on the RSK Bitcoin sidechain, enhancing Bitcoin with advanced functionalities. In addition, it is a DeFi platform with the widest array of features tailored for Bitcoin users and a protocol supporting a decentralized stablecoin, backed by Bitcoin.

Sovryn enables its users to engage in buying and selling BTC, margin trading with BTC, and the borrowing, lending, and yield farming of BTC and additional assets. This is facilitated in a manner that does not require custody or permissions, leveraging a version of BTC adapted for the Rootstock network, known as RBTC. Furthermore, Sovryn incorporates the use of its native SOV governance token, which is essential for participating in its bitocracy governance model and for accessing various rewards within the ecosystem.

Why Sovryn is Built on Rootstock

Rootstock (RSK), initiated by RSK Labs in 2016, is a sidechain that integrates with Bitcoin’s security through merged mining. This approach allows Bitcoin miners to secure RSK using the same resources dedicated to Bitcoin mining, with RSK currently secured by 52.4% of Bitcoin’s hash rate.

Rootstock’s two-way pegged token, Smart Bitcoin (rBTC), is tied to BTC on a 1:1 basis. rBTC facilitates the movement of funds between the two layers.

Additionally, Rootstock supports a virtual machine (VM) capable of running smart contracts, based on Ethereum’s EVM. This compatibility enables the execution of Ethereum-based smart contracts on RSK.

RSK’s smart contract functionality permits the creation of various Bitcoin dApps, positioning RSK as the foundational Layer 2 protocol for Sovryn’s development. Presently, Sovryn stands as the leading Bitcoin DeFi protocol, boasting over $100 million in TVL.

How to Use Sovryn

First go to the Sovryn DApp: https://sovryn.app/

Read and accept the terms and conditions if you agree and wish to proceed.

Select the type of wallet you wish to use i.e. either a hardware wallet or browser wallet.

For this demonstration we’ll be using MetaMask web3 browser wallet.

Before you proceed, ensure that your MetaMask is configured to interact with the RSK Mainnet.

Your wallet may prompt you to automatically add the network or you may have to manually add it.

Source: https://wiki.sovryn.com/en/getting-started/wallet-setup

You’ll need to send some rBTC to your Sovryn wallet in order to trade/swap, etc.

Once you have some RSK supported assets e.g. rBTC, you can proceed to trade/swap and use other features offered on Sovryn.

In this example, we are going to swap rBTC for SOV tokens.Pay the gas fee.

After you pay the gas fee, the transaction will be processed.

You’ll be notified once the swap is completed.

You can also verify the transaction on the RSK block explorer.

$SOV Staking

SOV, minted on Rootstock, is an ERC-20 token. Holding SOV does not automatically confer governance rights. Rather, it offers holders the opportunity to stake their tokens within the Sovryn protocol, which in turn grants them governance rights. $SOV tokens can be traded on Gate exchange.

SOV is distinct from “altcoins,” which are seen as alternatives to BTC. Instead, SOV’s role is to serve as a pseudonymous, censorship-resistant method for managing the Sovryn protocol’s parameters. This approach ensures the alignment of the protocol governors’ interests with the protocol’s long-term prosperity.

Sovryn Features

Interest-free loans in Bitcoin.
A decentralized, USD-pegged Bitcoin-backed stablecoin.
FastBTC relay for swift and efficient BTC to RBTC conversions and vice versa.
Connectivity between Rootstock (BTC) and Ethereum, BSC networks.
A spot exchange with limit orders, enabling cost-effective, immediate token trades with minimal slippage through the Sovryn AMM.
Margin trading options, including up to 5X leverage for long/short positions.
Lending pools and yield farming opportunities to generate income by lending tokens.

Overcollateralized borrowing from the lending pool.
Comprehensive portfolio management tools.
SOV staking benefits, including participation in fee distribution, decision-making, platform incentives, and airdrops.
Bitocracy, a governance model unique to Sovryn where proposals (SIPs) are discussed, refined through Sovryn’s social channels and Bitocracy forum, and finally decided upon in the Sovryn dApp, allowing stakeholders to shape the platform’s future.

In the future, Sovryn intends on introducing more features to the platform and ecosystem including: