The Sovryn dapp runs on the Rootstock (RSK) smart-contract network. Rootstock is a Bitcoin layer 2 sidechain that provides for smart contract functionality using bitcoin as the native asset. Rootstock is the most permissionless and censorship-resistant Bitcoin sidechain:
- Rootstock is permissionless, and its consensus mechanism is merge-mined proof of work (PoW) with over 60% of Bitcoin’s hashpower currently mining Rootstock as of February 2022. This means that Rootstock is mined by more hashpower than any other chain, except Bitcoin itself.
- Rootstock uses a two-way peg mechanism (called PoWpeg) that guarantees an equivalence between BTC on the Bitcoin mainchain and RBTC on the Rootstock sidechain. This two-way peg is probably the most secure peg based on a multisig system, in the crypto world. It uses a combination of hardware security modules (HSMs) and simplified payment verification (SPV) proofs with multiple different functionaries. It layers PoW (through SPV proofs) over HSM security, providing additive security and decentralization. Unlike Liquid, it is permissionless and highly censorship resistant. Unlike Stacks, it does not require a separate token to create the peg.
- Rootstock sidechain is constantly improving the two-way peg. In the next iteration, Bitcoin miners will directly participate, making the peg even less federated and even more tightly coupled with Bitcoin PoW.
Rootstock is designed to be compatible with the Ethereum Virtual Machine (EVM). This means that smart-contract systems written for Ethereum can be ported directly to Rootstock. In this way the best projects developed on Ethereum can find their way to Rootstock with the advantages of bitcoin as the native asset and the hashpower of the Bitcoin network supporting the consensus mechanism through merge-mining.
Rootstock has decisive advantages over Ethereum:
- Rootstock is not a competing chain; it is a Bitcoin sidechain. It supports the security and development of the Bitcoin network through merge-mining.
- Rootstock is Bitcoin native. You don’t need any token other than bitcoin to use it, and all fees are paid in bitcoin. This is the first DeFi dApp where bitcoin is the only gas you need to power it. This reduces the user friction of buying an altcoin so you can trade another.
- Fees are much lower on RSK than on Ethereum.
- Rootstock is secured by Bitcoin PoW. There is no need to understand or trust a different model and no need to be concerned that total bitcoin value on Ethereum could exceed total ETH value.
- BTC (in the form of RBTC) has the advantage of being the base asset on Rootstock.
RSK has a number of efficiencies over Ethereum, primarily with regards to storage handling and data structure. However, we do not believe that these represent an order of magnitude difference. The main benefit in terms of scaling for Rootstock is its ability to adopt those scaling solutions that prove viable in the future on Ethereum (rollups, for instance). We have said that “Ethereum is our testnet”—and this is one reflection of that.
Bitcoin the asset can only exist within the Bitcoin mainchain. To use bitcoin on another chain requires a mechanism that locks bitcoin on mainchain and creates an equivalently recognized asset on the related chain (Rootstock in this case). RBTC is the BTC-pegged native token of Rootstock, the network on which Sovryn is built. RBTC is an exact 1:1 peg with BTC. (1 RBTC = 1 BTC) When you transfer bitcoin into Rootstock, your bitcoin is locked and the equivalent amount released as RBTC on Rootstock. You need RBTC for any transaction on Sovryn. This includes trading, staking, or sending SOV, the governance tokens of Sovryn. In addition, all fees are paid in RBTC, so you don't need a separate asset just for transaction fees.
RBTC is Bitcoin on steroids. It enables your Bitcoin to interact with a range of services on Bitcoin layer 2 (on the Rootstock Bitcoin sidechain) and brings extra security, alongside permissionless transfers. You can convert between BTC and RBTC for use on the Sovryn platform using the FastBTC Relay. or try out the two-way Powpeg app.
Bitcoin on Rootstock has significant advantages over tokenized bitcoin on Ethereum (such as wBTC, renBTC):
- Rootstock is non-custodial. RBTC is not an IOU (like WBTC) and maintains censorship-resistance. The tBTC token is also non-custodial but is very expensive to make the conversion. The tBTC token is likely to get more expensive in their new model (higher collateralization ratios).
- With the FastBTC relay, moving bitcoin onto Rootstock is faster, cheaper, and easier than moving any of the Ethereum BTC-tokens onto Ethereum. This alone is a 10X improvement. This capability is also integrated with the Lightning Network using the Marduk Exchange, which is important to many Bitcoiners.
To learn more about Rootstock we suggest the following links: