Sovryn's Ingamar Ramirez on Bitcoin as DeFi's biggest untapped liquidity

Ashton Addison: What is Sovryn, and what does it offer?▶ 00:22

Ingamar Ramirez: Sovryn is a DeFi project building on a Bitcoin sidechain. Users can lend, borrow, trade and use leverage on one protocol, all in one place. It serves as a financial layer on top of Bitcoin. The platform is secured by Bitcoin, transactions are mined by Bitcoin proof-of-work miners, and gas is paid in Bitcoin.

Ashton: Why bring Bitcoin into DeFi?▶ 01:12

Ingamar: Bitcoin is basically the number one untapped liquidity source for DeFi. In the spring and summer of last year, a wave of lending, liquidity pool and yield farming protocols emerged. I fell in love with permissionless trading around the world, without KYC and without centralized middlemen. I also fell in love with Bitcoin, because it's the most secure, most decentralized digital reserve asset in the world, and I wanted to bridge the two. Sovryn's premise is to compete with centralized finance, which demands that you give up custody and power over your digital property rights to use your Bitcoin. The solution is to build ways to do it without all that trust and without those attack vectors on your own money.

Ashton: Is Sovryn a Bitcoin-maximalist project?▶ 03:21

Ingamar: We're not Bitcoin maximalists, and we're not willingly ignorant of the innovation that goes on in other ecosystems. We admire it. I personally view the Ethereum community as a mad science laboratory: there are explosions and broken beakers, but also unicorns and things we've never seen before. I think the Bitcoin community would do well to observe those innovations, adopt the best and leave out the rest.

Ashton: For Bitcoin holders new to DeFi, how does the sidechain work? Do you keep your private keys, or is your Bitcoin wrapped?▶ 05:49

Ingamar: You send your Bitcoin into a federated peg, secured by hardware security modules in an 8-of-15 multisig held by multiple institutions. There's no way for the Bitcoin to be taken away. The modules sign the transactions from the Bitcoin chain to the RSK chain. I'm not the most technical person, but that's more or less how it works. It's a lot more decentralized and secure than something like Wrapped Bitcoin, which is regulated and could be shut down at any point. In practice, you connect MetaMask, switch to the RSK chain in one click, go to FastBTC, generate the QR code and send your Bitcoin to it. It then shows up in your MetaMask wallet as RBTC on the RSK chain. From there you can trade against Ether, stablecoins, BNB and various other tokens listed on the exchange.

Ashton: Is Rootstock what lets Bitcoin plug into MetaMask and the wider DeFi ecosystem?▶ 07:52

Ingamar: We view Sovryn as a long-term multi-chain project, but Rootstock has two things we really want. One is the security of Bitcoin, since it's secured by Bitcoin proof-of-work miners. The other is compatibility with the Ethereum Virtual Machine. Basically anything on Ethereum we can port over quite easily to the Rootstock chain, which makes it easier for users and developers as well.

Ashton: Are the fundamental DeFi products all available on Sovryn?▶ 09:00

Ingamar: Yes. You can swap, you can borrow like it's Compound, you can earn interest like it's Aave, and you can leverage like it's Fulcrum. We're trying to provide a macOS experience. It's not just a word processor, it's not just a calculator, it's not just a browser. It's an all-in-one place.

Ashton: What does the SOV token do?▶ 09:26

Ingamar: SOV is designed to be a governance token, a way to make decisions collectively on upgrades, new features and new products. The innovative part is that you can't just borrow a bunch of SOV, override a proposal, give the SOV back and pay essentially nothing for it. To accrue voting power you have to stake your SOV. You decide how long, and the longer you stake, the more governing power you get, multiplied for up to three years. I think that's a great way of incentivizing long-term thinking from the community. It's not just voting power, either. You also accrue more of the fees the system generates, as well as staking rewards.

Ashton: Where is Sovryn today, and how long has it been running?▶ 04:33

Ingamar: It's about a year old. We went fully live around April with no limits on the liquidity you can put in. We do audits regularly, so we wanted to ease our way into opening up to all users. Just yesterday we reached $100 million in value locked across the lending, the AMMs and the staking contracts, which is a big milestone for us. We can't leverage the Ethereum or Polygon communities. We're building entirely on the Rootstock chain, which is on the come up, so we're happy to push that ecosystem forward.

Ashton: What's on the roadmap?▶ 11:27

Ingamar: Very long term, I could see things like mortgages and real-world legal contracts being executed using the Sovryn protocol, but that's pretty far down the road. In the short term, we're working on a permissionless, Bitcoin-backed stablecoin. We're also working on a launchpad called Origins, which lets new communities fundraise and self-generate using the same system we used to launch our own community, governance and token. Other ecosystems have their own launchpads, and we're trying to make a decentralized one for Bitcoin builders. We also want to integrate our stablecoins with mainstream, traditional financial applications. We're not trying to stick to our own little silo. We want to bring our platform to as many users as possible.