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Sovryn is a Bitcoin-native protocol that advances financial sovereignty in a way that is true to Satoshi Nakamoto's vision. Our purpose is to continue Satoshi's mission for establishing new territories of freedom by building trustless economic tools on Bitcoin.
As a result, we created an autonomous platform for trading, leveraging, and lending that runs on a bitcoin sidechain. This is where SOV comes in. We created the token as a way for people to stake in the Sovryn protocol, which then provides the token holder with governance rights. But keep this in mind: SOV isn’t an altcoin that seeks to be a cryptocurrency alternative to Bitcoin.
The purpose of SOV is to provide a pseudonymous, censorship-resistant mechanism for governing the parameters of the Sovryn protocol while incentivizing the long-term success of the project. On top of this, there are five solid benefits of staking SOV that you should consider. Let’s check them out:
We use a Bitocracy, which gives weighted voting rights to participants based on how much SOV they are staking. Sovryn users can stake up to a three-year period and during this time their SOV liquidity is suspended to prevent arbitrage.
This Bitocracy system is designed to be a self-governing, decentralized platform where users interact with the blockchain with complete financial sovereignty, enjoying Bitcoin PoW security and long-term incentives for contributing to the protocol.
Bitocracy means that stakers can make changes to the protocol by voting as a community on proposals. If a staker does not like the direction the protocol is taking, they always have the option to exit and will only have a fee for exiting early.
You’d better believe that there are perks! Aside from having the pleasure of participating in Bitocracy, SOV token stakers receive staking rewards proportional to their share of total voting power. Thus, if you are staking with 5% of voting power, you would get 5% of staking rewards in RBTC.
Staking rewards are sourced from Sovryn platform transaction fees and any penalty fees from users who unstake early. Naturally, this all adds up to a nice passive income source for SOV stakers.
Stablecoins as we know them aren’t quite as stable as we think. They are an excellent idea in theory: cryptocurrencies that can be used for transacting, trading, and investing at a value that is familiar and steady. But - stablecoins rely on intermediaries backed by dubious sources of collateral that are inferior to BTC. On top of this, they are deeply threatened by regulators and are subject to increasing amounts of governmental control.
This is why the Sovryn protocol has introduced two subprotocols that will kick-start the adoption of bitcoin-backed stables: Sovryn Mynt and Zero. Decentralized stablecoins are game over for the old system. Sovryn Mynt is designed to aggregate different methods of creating BTC-backed stability. Currently, MYNT is an SOV-bonded token and SOV stakers will be airdropped 1% of the MYNT supply.
SOV stakers receive a portion of MYNT tokens as part of their staking revenue over the course of a 1-year period. The Exchequer Committee will distribute the Incentive Supply of MYNT to fully-vested SOV stakers over a 12-month period using the existing revenue distribution mechanism that is built-in to the Sovryn protocol. You will simply go to the Rewards page and claim them like you did with BabelFish and all rewards in the past.
The Zero protocol accomplishes two things. First: it is one of the methods of creating BTC-backed stability that will feed into the Sovryn Mynt. Second: it allows users to borrow stables (i.e. dollars) at zero interest rate.
That’s certainly a game-changer - and many people are tremendously excited at the prospect of 0% interest BTC-backed DeFi loans. This means that HODLers will potentially never need to sell Bitcoin again, as they can borrow against their Bitcoin for indefinitely long periods. All they need to do is maintain a minimum collateral ratio of 110%.
ZERO is a continuous token that is economically tied to SOV through a bonding curve smart contract. It is used for the distribution of borrowing and redemption fees.
Further, the bootstrap and bonding curve smart contracts define a mathematical relationship between the ZERO/SOV bootstrap conversion rate, the amount of SOV that participates in the bootstrap event, the Initial Supply of ZERO, and how much SOV is allocated as reserves for the bonding curve and Zero Treasury. View the formulas and calculations below:
Currently, fully vested SOV stakers are set to receive a 3% share of total ZERO supply. Users can stake ZERO and earn a pro-rata share of the borrowing and redemption fees in ZUSD and RBTC. 20% of Zero subprotocol revenue will accrue to SOV stakers and 80% will accrue to ZERO stakers.
In the future we will probably see more subprotocols and ecosystem projects airdrop their tokens to SOV stakers, such as the upcoming droppr NFT project.
For the first time in history, Decentralized Finance (DeFi) allows regular people to have a say in their financial independence. People won’t need to rely on centralized financial intermediaries such as brokerages, exchanges, or banks. Why rely on traditional financial institutions when we can utilize blockchain and DeFi technology?
Staking SOV is an exceptional way to achieve financial sovereignty. Imagine - just by HODLing a token you can have a say in the direction of the entire protocol while earning passive income from multiple revenue sources.
Now is a smart time to get onboard and start staking your SOV. Over the next year, SOV stakers will be awarded a percentage of MYNT and ZERO on top of the normal rewards earned from staking.
In addition, staking SOV gives you a voice in the Sovryn ecosystem - allowing you to participate in determining the direction of the project. Imagine being able to do that in the fiat system so easily! It’s a great time to acquire SOV if you haven’t already.
Once you’ve obtained your SOV, visit the dapp to start staking and claim true financial Sovrynty.
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