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We are in the middle of a historic transition from an economy based on fiat and dominated by the US Dollar to an economy based on crypto and dominated by Bitcoin. This transition, from the old to the new, is occurring quickly but unevenly. Most economic activity, even in the crypto world, is still denominated in dollars and reliant on fiat gateways. Exchanges are fiat gateways. Centralized stablecoins are gateways. Both are points of continued control and capture by the old system.
Truly decentralized, Bitcoin-backed stablecoins are perhaps the single most necessary tool for the continued transition away from fiat.
There is perhaps nothing the Bitcoin ecosystem can offer that will do more for financial inclusion than providing stable money, backed by sound money.
During the gold standard, people rarely transacted with the metal itself - preferring to transact with notes that were gold-backed instead. Indeed, banknotes were the mechanism that allowed for the gold-backed economy to transition to the fiat economy. Stables are the mechanism by which we will transition from fiat to digital gold.
The Sovryn protocol will soon introduce two subprotocols that will kick start the adoption of Bitcoin-backed stables and demonstrate their transformative power.
The two subprotocols will be the Sovryn Mynt and Zero.
Sovryn Mynt will be the protocol that mints the Sovryn Bitcoin-backed stablecoin; $MYNT. The contract will aggregate different methods of creating BTC-backed stability. Various Bitcoin-backed stablecoins will be deposited and held by the contract, which will mint the aggregated stablecoin. This stablecoin will also be redeemable for the Bitcoin stablecoins held in the pool or Bitcoin.
There are two significant advantages to an aggregator of this kind:
The first BTC-stability protocols that will feed into the Sovryn Mynt are Money on Chain (MoC) through the DOC token and Zero through the ZUSD token.
Zero is a protocol for accomplishing two things; First, it is one of the methods of creating BTC-backed stability that will feed into the Sovryn Mynt. Second, it provides holders of BTC the ability to borrow stables (i.e. dollars) at zero interest rate. This means that HODLers never need to sell Bitcoin again, as they can borrow against their Bitcoin for indefinitely long periods.
Zero-interest rates can be a game-changer, since the two primary concerns HODLers currently have are:
Zero solves both these problems with a zero-interest rate and a decentralized borrowing service.
As an example of the power of zero interest rates, consider Adam. Adam has enough Bitcoin to easily buy a house. However, Adam does not want to sell his BTC. He also does not want to borrow at 5-8% a year when mortgages are available at 1-3% a year.
With Zero, Adam can keep his Bitcoin, buy his house and pay 0% a year. He can even then take a mortgage out on the house he now owns, and buy more Bitcoin, paying 2% a year!
Sovryn Mynt and Zero will be two of the latest expansions of the growing Sovryn ecosystem (if both SIPs are passed). They will demonstrate how Sovryn makes Bitcoin ever more useful, accelerating hyperbitcoinization.
Zero and Mynt also demonstrate the ability to create subprotocols, expanding Sovryn into a platform not just for Bitcoin DeFi but for an entirely new Bitcoin-backed, self-governing jurisdiction.
The result is more superpowers for Bitcoin, more utility for SOV, and more freedom for all of us.