It is almost impossible to talk about a Web3 project without first giving credence to the project that laid the groundwork for all this, Bitcoin. It is even more important to bring it up when we discuss Sovryn.

Sovryn is a premier decentralized finance (DeFi) project on the Bitcoin Rootstock sidechain. Over the years, It has made a name for itself by championing decentralization, and its relationship with Bitcoin is a testament to this.

Bitcoin might not have been the very first crypto project, but it is so pivotal that people see it as the start of all this, and this is why it is routinely brought up. Bitcoin’s ethos is decentralization, and Sovryn wants to take this vision even further.

As a DeFi project, Sovryn is creating several opportunities for its users. They can trade, swap, lend, and so much more. But judging by their “black paper,” Sovryn still has a lot in store for its users. Here, we will discuss the past, present, and future of the DeFi of the rise, Sovryn.

What is Sovryn?

Sovryn is one of the top Web3 projects bringing decentralized finance solutions to people in the crypto space. It was made to be an alternative to the corrupt centralized system.

Sovryn is a decentralized trading and lending platform, which means that it is not run by a group of people or a governing third party. Instead, tasks are performed by a smart contract that considers the votes of Sovryn members. Holders vote on the Sovryn governance token, but we will discuss that later.

Sovryn is a multichain project hosted on the Bitcoin sidechain, Rootstock (RSK), and BOB, a hybrid Layer 2 chain.
In its quest to provide DeFi solutions, Sovryn has stocked up its decentralized application (Dapp) with features that will empower users. Users can perform spot trades, margin trades, swaps, loans, and more. Sovryn also has a stable coin, the Sovryn dollar, DLLR. It is a stablecoin that is pegged to the US dollar but backed by Bitcoin, with two heavy hitters behind DLLR, holders are more than secure.

History of Sovryn

Although Sovryn is a DAO, there is a group that lit the spark to the flame that became Sovryn, and they were an anonymous “distributed collective.” They came together in the heat of the COVID-19 lockdown after seeing how things were run and lost hope in the centralized government.

This made the group realize that they could do something about the ills of centralization and started work on Sovryn. In August 2020, a Sovryn developer published a manifesto, and by early 2021, the Sovryn DAO had launched.

Sovryn has remained committed to its decentralization efforts; several features are testaments to this, but Sovryn still has more up its sleeve.

How Does Sovryn Work?

As a DAO, Sovryn relies on smart contracts, which are protected by Bitcoin’s proof-of-work model. Sovryn enjoys these and other benefits of Bitcoin, but it is not built on the Bitcoin blockchain; instead, it is on Rootstock (RSK), a Bitcoin sidechain.

As explained earlier, sidechains benefit mainchains by providing layer two (L2) services. RSK provides Bitcoin with smart contrast capabilities, which Sovryn takes advantage of. BTC is sent to RSK through a two-way pegged crypto bridge. This means that when BTC is sent to RSK, the original BTC is pegged and then released in RSK as RBTC, and when it is sent back to Bitcoin, it is pegged in RSK and released as BTC. You should also note that with something called merge mining, miners can mine both BTC and RBTC at the same time.

Sovryn’s relationship with Bitcoin is what keeps it going. The gas fees for its smart contracts are paid with Bitcoin, and Bitcoin’s proof-of-work makes it secure and trustless. Some might argue that it also reduces the gas fees on Sovryn.

Main Features of Sovryn

Sovryn has several features that show its commitment to decentralization. In this section, we will break down a few of them. These features were made to solve several smaller issues, but when combined, Sovryn’s decentralization mission is clear.

Fixed-Interest Borrowing and Lending

Sovryn users can use the DeFi solution to improve their finances; one way they can do this is through borrowing and lending features.

Lenders on Sovryn put their funds into a lending pool, and when a borrower takes from the pool, the lender earns from the APY (annual percentage yield). The APY will change depending on the demand for loans. Like most other crypto projects, Sovryn is fully decentralized.

Sovryn borrowers can get loans just as easily. They will be issued a loan offer from the lending pool and will pay APY. Borrowers would have to cough up collateral as well, usually 150%, but if the collateral is SOV (Sovryn’s governance token), the collateral rate is 300%. There are other peculiarities with borrowing on Sovryn, but this is a good building block.

Zero

Aside from its regular loan feature, ​​Sovryn takes it a step forward by having a loan plan with no interest at all. Zero is a protocol that allows you to borrow the stablecoin ZUSD without interest and with a lower collateral rate (110%). A key feature of the Zero is that the collateral must be RBTC. Zero is also non-custodial and highly decentralized.

Zero Stability Pool

After discussing Zero, it is only natural that we touch on its stability pool. Zero allows for 0% interest loans; however, these loans require collateral, and when it drops below 110% of the loan, the loan will be liquidated. This is why there is a stability pool.

The stability pool makes money when liquidity happens, it buys the Bitcoin at a discount of up to 10%, and the more this happens the higher the APR, which could be over 100%. There is also a guaranteed 5% base APR no matter what happens.

Margin Trading

Sovryn has regular spot trading, but what is more interesting is its margin trading. Margin trades allow you to increase your potential gains; however, traders should be cautious because they can also increase potential losses.

When you do spot trading, you buy or sell a token at market value, and depending on the market, you could make a profit or loss. With margin trading, you borrow money to trade with; this way, your potential wins are higher. Sovryn allows traders to leverage as high as five times their assets to trade with.

Sovryx Dex 2.0

Sovryn has gotten an upgrade; it has become a multichain project and is now available on RSK and Build on Bitcoin(BOB). BOB is a hybrid L2, it has BItcoin’s security and Ethereum’s liquidity. With the new Sovryx DEX 2.0, we can bring the liquidity of Ethereum into Bitcoin and strengthen it.

The new DEX is capable of trading, staking, and providing liquidity to automated market makers (AMM LP). It also allows for the trading of Runes, the new token standard on Bitcoin, the first one is $POWA.

Sovryn Token Structure

There would not be a Sovryn ecosystem without the tokens that carry it. There are two main tokens on the Sovryn mainnet. First, we have the SOV token that is primarily used for governance, and then the Sovryn dollar (DLLR), the stablecoin that powers a host of Sovryn features.

SOV Token

SOV is the governance token for the Sovryn platform. Sovryn has emphasized that SOV is only to be seen as a representation of a stake in Sovryn. Holders of SOV can vote on important changes to the DAO, after which the smart contracts take the vote into account and implement it. When the DAO turns a profit, the value of a SOV increases and in this way, they would get a “profit.”

SOV Allocation

SOV debuted in 2021 when the DAO launched with a plan for equitable allocation. With a total supply of 100,000,000 SOV, there is enough to go around. 25% was allotted to the founders of Sovryn, 14.5% to the early funders, 10% to the development fund, 6.8% to programmatic sales, 5% to the ecosystem, and the largest share, 38.65%, was allocated for adoption.

Sovryn Dollar (DLLR)

The Sovryn Dollar (DLLR) is Sovryn’s response to the overcentralization of stablecoins in the Web3 world. It is a BTC-backed stablecoin pegged to the US dollar on a 1:1 basis. Most stable coin projects rely on centralized middlemen and are backed by inferior tokens.

DLLR is backed by BTC, which has proven itself to be a crypto powerhouse. There are currently two BTC-backed stablecoins, and DLLR will take the best bits of both of them and then add better liquidity. DLLR will also provide better stability. It will rope together the current stability systems, then aggregate them to mitigate their weaknesses and maximize their strengths to produce the best results.

Take Action on SOV

To have some SOV for yourself, try a centralized exchange like Gate.io. It’s a simple process, first, you have to sign up and fill in all the KYC details, then fund your account. Now, find out how much SOV costs and how it has been fairing then follow the simple steps to buy SOV either on the spot market or derivative market

News on Sovryn

Sovryn is taking Bitcoin into a new age with the introduction of BitcoinOS, the super layer that will turn Bitcoin into an operating system. Other L1 blockchains have ZK rollups, but because Bitcoin does not make smart contracts, this can’t work. In its place, there will be Sovryn rollups that will then use Bitcoin as a data availability (DA). With this, Bitcoin will have a foundation to house Dapps. BitcoinOS launched this year, and Sovryn holders are pumped.

Is Sovryn a Good Investment?

The Sovryn DAO envisions a more decentralized world and is making moves to achieve this vision. Sovryn believes in Satoshi Nakamoto’s vision for Bitcoin and is working to improve it. With its equitable governing structure and great features, Sovryn’s vision of decentralization is getting closer each day.