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Greetings Sovryn mutants! Get ready to exercise your voting freedom as we head towards SIP 18. In this SIP active Sovryn community member Dark Knight proposes to provide deep stablecoin liquidity to Sovryn through BabelFish, the stablecoin aggregator.
BabelFish acts as a decentralized bank having branches on different chains, accepting and distributing USD-pegged coins. This will provide enhanced liquidity to whatever system it gets integrated into. The underlying idea is to launch a decentralized protocol by means of a private token sale to the committed members of Sovryn. DYOR and check out the discussion around Babelfish on our Forum here.
Today, stablecoins are storing over $80 billion USD of value. This is equivalent to nearly 4% of the total amount of USD in circulation today. However this liquidity is split across multiple chains. As decentralized finance picks up momentum, the popularity of alternative chains to Ethereum such as Binance, Rootstock and Avalanche will grow fracturing the ecosystem further. BabelFish aims to turn these multiple liquidity streams into a large, single liquidity lake, thereby simplifying stablecoin management for DeFi exchanges and protocols.
Presently, bridging stablecoins to Sovryn via the RSK token bridge takes up to 24 hours. But by leveraging the power of Binance and Ethereum bridges, BabelFish can build a secure protocol to simplify and amplify the experience of USD management.
This not only adds to Sovryn’s utility but also provides deep liquidity to the platform, adding value to Sovryn and Bitcoin.
BabelFish aims to be the first money lego built for and on Sovryn with the mission of bringing stablecoin liquidity to the ecosystem. It is a decentralized aggregator and distributor of all stablecoins that earns yields on the deposit’s respective chains and reinvests the interest in a community pool of rBTC, that acts as the ultimate insurance.
BabelFish cannot be managed by a central authority, but by an active community of participants akin to the example being set by Sovryn. We believe that fellow Sovryns understand the benefits of decentralized organizations, from a legal and technological perspective. Building a decentralized autonomous organization is a core priority for BabelFish.
Users will vote on the direction of the protocol using FISH tokens and the token sale to bootstrap the protocol will be conducted using SOV. These tokens will have a varied allocation out of which a small percent would be used by Sovryn to create an AMM SOV/FISH pair that can help discover fair market value.
Work is in progress on a BabelFish MVP that can aggregate all different USD-pegs and stablecoins on Ethereum and Binance chains into a single stablecoin ‘xUSD’ that can be exchanged and redeemed 1:1 by any of its underlying assets, thus providing deeper USD liquidity.
BabelFish seeks to lend its stablecoin collateral on AAVE, Compound, Venus and other lending protocols. The yield earned would periodically be used to acquire rBTC for the protocol’s insurance. Users will earn FISH tokens to govern the protocol’s accepted stablecoins, allocations and use of funds.
The main reasoning behind proposing SIP 18 is to:
I’m Dark Knight, a fellow Sovryn community member like you. Passionate about the first decentralized finance platform on Bitcoin Layer 2, I’ve been eagerly participating in Sovryn’s trading, lending and Bitocracy. This is a draft SIP for a simple and fast solution to provide deep stablecoin liquidity to Sovryn.
The solution, dubbed ‘BabelFish’, acts as a decentralized bank with branches on different chains accepting and distributing USD-pegged coins. The intention is to launch a decentralized protocol with a committed community through a private token-sale to members of our communities. We believe this will be a net positive for Sovryn’s liquidity and community, and are looking forward to a healthy discussion and constructive feedback to make this a reality asap.
Thank you everyone’
So Sovryn mutants, please take this time in advance to DYOR, look out for SIP 18 coming to Bitocracy soon and be sure to make your voice heard.