It is my contention that assets have deep network and liquidity effects that can provide a significant moat. This is especially true of currencies, since they become a MoE - a standard payment asset.
The difficulty in a protocol like Zero, is not generating borrow demand. it is generating HODL demand. If we are able to build a network effect around the Sovryn Dollar, and I believe we will achieve this before we start seeing significant competition - it will be extremely difficult and expensive to compete with us. Just look at the dominant position USDT has achieved on exchanges or USDC in DeFi.
In other words, we will have an asymmetric advantage, and this will provide our moat. We will not need to compete on price.
Yes, having ready “human capital” (I don’t like this expression) and experience, an history, is a great way to attract crypto retail. But to me, network effect is all, it is the true form of hard collateral. We don’t have just competitors. Like CZ says of cex other than his, they have “peers”. A copycat of Sovryn with no centralization issues, ie on pair or superior to us in those terms, would be a companion to us offering arb opportunities (arb was the reason behind the creation of Tether). We just need to keep the good products, protocols…
This also applies to other blockchains. We consider merge mining the solution more coherent to the pristine nature of Bitcoin. But other blockchains have teams, solutions and trials with actual value, maybe not in Bitcoin terms but certainly so in real world ones. We need to be a bridge for those solution to be successful with us. We need to put at use their liquidity. We, at RSK, need to be the moat around Bitcoin but also a space of open discussion. I don’t see, any time near, bigger Institutions coming to Nakamoto consensus - except maybe Russia, or new protocols that use pow, dag and not Bitcoin. I don’t see neither Ethereum and the others collapsing, or attracting less liquidity. Not in the near future, not without developments in knowledge.
Any solution that increase the HODL demand for Bitcoin is good to us, to RSK and to Btc miners, being it on Sovryn or even in TradFi. We actually need to increase borrow/investing demand in the overall platform, by offering other networks the asymmetric advantage given by Bitcoin.