Bitcoin has been known as the king of the cryptocurrency industry for nearly 13 years now. But, ever since Ethereum was launched, the crypto industry has been walking two paths at the same time, with one seeing digital coins as a method of payment, while another focused on the blockchain technology itself, where coins were simply a fuel that would help run various protocols, applications, and alike.
Due to their technical differences, the two were considered forever separate from one another, with only indirect ties. For example, Bitcoin could not be used in DeFi without launching Wrapped Bitcoins — Ethereum-based tokens that are only backed by BTC. BTC itself had no access to DeFi protocols. At least, until now.
With the launch of the Sovryn Protocol in April 2021, the clear line between the two started to get erased, as the Sovryn Protocol finally started bringing DeFi capabilities to Bitcoin’s native network.
The Importance of Sovryn
To put things simply, Sovryn emerged as the first, and currently only decentralized financial protocol built on Bitcoin’s network. This started to transform Bitcoin’s network into something between the traditional Bitcoin and Ethereum.
The project was launched in 2020, but it wasn’t until April 2021 that the protocol saw its official launch, as mentioned. Back in the early days, it only had 5 developers. By the time it launched, it had over 60, and after a recent bug bounty program, over 1,400 of them joined up to create and submit their own projects that will enrich the Sovryn ecosystem.
The project also caught the eye of institutional investors, and through their help, it raised up to $23 million. It was backed by the likes of Monday Capital, Collider Ventures, Greenfield One, Pomp, and others. It also got support from the industry leaders such as Dan Held, Anita Posch, and more.
On top of that, it is worth noting that it already saw great success, managing to facilitate $568 million in transactions, and a $77 million-large TVL (Total Value Locked). It also launched the mentioned bug bounty program that offered a $1 million reward for the most crucial flaws, and the bounty has never been claimed.
What Other Benefits Does Sovryn Offer?
Sovryn protocol has identified a number of solutions that traders in the DeFi sector tend to encounter, and then it figured out ways to solve them. For example, one of the biggest problems with Ethereum right now is the high cost of gas fees. The project solved this by ensuring that its own gas costs will remain at 1/100 of what they cost on Ethereum.
Another issue in DeFi are privacy requirements, which are forcing people to give away their personal information. The project solved this simply by ensuring that it is, and will always remain permissionless. The bug bounty took care of any security holes that might be present in the protocol, of course, and the issue of inefficient stablecoin liquidity was solved through xUSD pools, where all stablecoins work together to improve liquidity.
Finally, there was also an issue of blockchain incompatibility across the entire DeFi ecosystem, but Sovryn found a solution to this as well, by becoming EVM-compatible. As such, it can be used on all blockchain platforms.
In short, Sovryn will not only grant Bitcoin direct access to DeFi and all of its activities, such as lending, borrowing, trading, and more, but it will also do it better than blockchains that were invented DeFi. Also, all of this is only a start, as the project has countless more plans for the future, such as launching bridges to the world of smart contracts, creating its own Launchpad, introducing leveraged trades, bringing oracles, derivatives, NFTs, BTC-backed stablecoins, and more.
In the end, not only will Bitcoin become a major DeFi player, but it might also become one of the best DeFi ecosystems in the entire sector, all thanks to this single project.