Many analysts and DeFi thought leaders have opined that decentralized finance will be the future and eventually replace traditional financial systems. However, this will be a far cry if the DeFi space cannot attain interoperability among the multiple projects operating within the ecosystem. Cross-chain interoperability will certainly power the future of decentralized finance. Interoperability is simply a cross-communication between two completely different systems.
Understanding the importance of interoperability in DeFi, series of projects are seeking to build an interoperable platform. Among these innovative projects is the Sovryn project. It is a decentralized Bitcoin-based DeFi trading and lending platform. DeFi on Bitcoin is arguably the biggest untapped opportunity in the crypto space, and Sovryn appears to be the fastest horse on the race.
Overview of the Soveryn Platform
The Sovryn DeFi protocol is a full-stack, decentralized financial operating system. Soryn is an on-chain decentralized protocol deployed on the Bitcoin side-chain. The project started in 2020 and was officially launched in April 2021. Upon its launch, the protocol remained under the control of its community members and stakeholders. There is no single individual, company or organization that controls the Sovryn protocol. At this moment, Sovryn is Bitcoin’s fastest-growing ecosystem and the world’s first Bitcoin-native application to allow users access to decentralized lending and trading. To some analysts, while Bitcoin is the king, Sovryn is the queen.
Sovryn is the decentralized finance exchange where users control their Bitcoin from end to end. It is the DeFi operating system designed for Bitcoin, on Bitcoin. Since its official launch in April, Sovryn has facilitated transactions valued at $568 million, $77 million in Total Value Locked (TVL) and $551 million Assets Under Management (AUM). Sovryn currently has more than 31,000 active users, and the project attracted 1,400 developers during its Hackathon event. These developers submitted 59 projects for the Sovryn ecosystem.
According to its blackpaper, Sovryn is seeking to build an open, fair and transparent financial system for the world. To help reposition the DeFi space for the future, Sovryn is powering cross-communication within the DeFi space.
The Sovryn Interoperability Agenda
One of the major setbacks with blockchain and decentralized finance is that blockchain can be incompatible with the entire DeFi ecosystem. To power interoperability within the DeFi space, Sovryn provides the needed infrastructure for the Bitcoin-native decentralized finance layer that is well-integrated with Ethereum and other chains and crypto-assets. The protocol is currently offering Bitcoin-class financial tools, and there are many more currently in development.
Sovryn is built on Rootstock (RSK), an Ethereum Virtual Machine (EVM)-compatible Bitcoin side-chain. The protocol has also made it possible for anyone to build EVM-compatible smart contracts that are secured by the Bitcoin proof-of-work consensus algorithm. This ensures that the Ethereum community has a bridge to Bitcoin’s layer-2 financial infrastructure. Sovryn’s EVM compatibility allows Ethereum dApp developers to bridge to Bitcoin layer-2 financial infrastructure and leverage Bitcoin’s high-level security. The Sovryn protocol also has a FastBTC Relay feature that allows users to quickly convert their BTC to rBTC for use within the Sovryn ecosystem.
Therefore, by integrating the EVM, Sovryn allows for different blockchains to interact with one another. It ensures these blockchains do not exist in isolation. The implication is that there will be more cross-chain interoperability, which is crucial for the future of decentralized finance. Therefore, the Sovryn protocol increases the viability of these different blockchain networks, thus allowing for them to interact with one another. For example, the Ethereum blockchain can interact with the Binance Smart Chain seamlessly.
Sovryn’s Additional Value Proposition
Aside from powering interoperability within the DeFi ecosystem, Sovryn provides value to its users in numerous ways. Firstly, the protocol is far cheaper than other platforms on the Ethereum network. This is made possible due to the low gas fees. Also, the enhanced security of the Sovryn platform helps to ensure that risk is highly minimized and a less significant issue.
As Bitcoin’s fastest-growing ecosystem, Sovryn is in pole position to revolutionize the DeFi space with its interoperability agenda. Sovryn doesn’t just have technical bridges for the transfer of assets; it also connects the Bitcoin network and the entire smart contract world.