I was thinking last night about all these ways we’re earning rewards either in Staking,Yield farms,Lending,Trading,etc.
Would enough Sovryn investors be interested in securing the bitcoin network by purchasing bitcoin mining hashrate contracts within Sovryn platform?
Example: Deposit SOV tokens that would lock you in for 36months like we do for staking, by Forfaiting your SOV so we can fund the contracts.
Based on the curent value of your deposited SOV, this calculates you a % of your hashrate into the pool. There will also be a slider which you can auto-contribute your rewards or a % of your rewards back into the pool therefore increasing your % into the pool, extending your contract term.
If you change your mind in the future, this would contribute to penalty based on how long you’ve been involved and you can recieve a fraction of SOV at current market value.
This is a rough draft and feel free by taking this idea apart.
Sounds very interesting! Is there anything that you’re modelling this on? It sounds a little bit like the BMNs on Blockstream but there is no staking involved there; is there anything else that is similar, that we could look to for a more concrete idea on its implementation?
I’m personally invested with a hedge fund mining company myself. Had lawyers look over it, and everything checks out accordingly.
First contract starts you at over $$64.95/Th for 36months + capEX 500TH but prices are increasing next week.
MAX hashrate listed is over 25 000 TH which will put you into the million $ bracket, but based on Sovryn funding and how WELL Mynt went, potentially would allow us to own more than this and we also will get major discounts on the capEX fees.
I can see how this part might be complicated, due to the gas needed for transactions. As the contributing wallet would need to be either having an “account” in the protocol to hold the gas ready for any time this transaction is due (which goes against the protocol’s absence of personalized financial accounts to hold these assets) or the wallet has to be enabling the transaction manually (which would negate the purpose of the automated reward contribution back into the position).
Maybe a script would be implemented such as the payout reward every friday for RBTC rewards. Weekly payout, the Sovryn will cover the cost in fees. If you add auto-contribution, this would take into account on the script and Sovryn would keep your contribution adding it to the pool.
Yes, unfortunally all miners are centralized in one facility or another. I don’t think you could truly have a Decentralized bitcoin mining company, as someone or entity would have to run the machines. Although the company I deal with, they do mine in different jurisdictions.
That would then warrant a percentage of returns to go back into the protocol. Because it just being altruistic and covering the fees is not a viable possibility.
Even if you coudln’t add into a script, you can manually buy SOV and invest over time. Also with Taproot coming into RSK network and lightning network, tx fees will be insignificant next year.
I had asked about the possibility of a similar sevice in the Origin discord a week ago and gave the example of BMN from Blockstream, I imagined a service like this could be offered as a sub-protocol within the Sovryn ecosystem. BMN costs 290k € and is only available to accredited investors, I thought if a miner (I think there were some miners in the Pomp Syndicate?) could offer a similar service on the Sovryn/Origin platform that would be very interesting for me as I get to support/secure the BTC network while earning BTC.
If we pool funds from the community we could also get more hash power and a better rate instead of people investing individually (I dont have experience with such fee discounts so I am going with what the OP posted).
Regarding the slider and auto-contribution, perhaps the devs can chime in on the complexity of implementing that. I would personally be happy with just earning some BTC every 2 (or 4) weeks similar to how the reards are distributed now and claiming them whenever I want.
Could soome one from the treasury team comment on the possibilty of the Sovryn protocole as a DAO itself investing in BTC mining to generate revenue? Perhaps this would be another source of income for the protocol if idle funds are available to do this.
Yes it is true that bitcoin mining rewards in the future will be for accredited investors, and retail with not a lot of capital will be left in the dust. If you haven’t locked in mining contracts and/or machines with a warehouse, more than likely you won’t be able to withstand a bear market.
This idea gives retail and 3rd world countries to have skin in the game and give them access to mining hashrate they otherwise wouldn’t be able to have. Thus increases Sovryns treasury for future projects.
This isn’t an easy product to build. Fortunately, Leo Zhang with Alkimiya Research is building it and I believe it will be launching soon. The problem is the initial launch will be on Ethereum.
I’ve been rabidly trying to get him to launch on RSK and/or fork on Sovryn. If we’re interested in this product our best route is to hound Leo and @yago to discuss making hash-rate derivatives a sub-protocol on Sovryn by forking their work on Ethereum. We want the actual creator and team launching this product instead of us using our dev resources who may not be able to execute quite as well.
I think I had also sent to @Ingalandia back in July. Any chance you all connected?
A very exciting idea. I am also curious how a BTC mining operation would respond to a DAO as an investor. And it’s another reason to make SOV desirable and valuable.
I think this is a good starting point for creating hashrate derivative contracts. In other words, this theoretically gives the ability to buy and sell the most pure Bitcoin yield possible on Sovryn, fresh mining rewards.
The general answer is yes because RSK is EVM compatible.
However, there is nuance to that question. The current Alkimiya project is built on Ethereum (but not yet formally launched). So there is risk the concept could flop. There also is risk that the smart contract hasn’t been battle tested or is just generally bad code. But if the concept and code prove to work (which I speculate yes), then ideally we can convince Leo and the actual founders of Alkimiya to launch as a sub-protocol on Sovryn. I’ve hammered this point to them in their Discord channels so they’re well aware of Sovryn and interested but I think their primary focus is on proof of concept with Ethereum first.
I’d really like some comment from the core team’s thoughts on this project. I’ve mentioned it for the past few months but no one has acknowledged it AFAIK.
It checks all the boxes:
EVM compatible
A new way to generate Bitcoin yield
Supports PoW miners which makes it long term specific and unique to Bitcoin.
New and innovative financial primitive that doesn’t already exist 100X on other EVM chains.
I think it’s an opportunity to bring really cool value to Sovryn. I’m just a dreamer so if there is anything interest realistically it needs input from core team or other developers who may want to work on it.
I feel like sovryn should dedicate some of the treasury to bring this type of product to this platform.
I don’t know if it is technology compatible but if there is a path, I think it should be followed, right now blockstream BMN is traded OTC on a telegram group and soon will be available on bitfinex, Volcano bonds will also be available on bitfinex (both bare instruments on liquid network).
If Alkimiya is the closest/easiest project to be ported here, I think sovryn team should actively trying to win it over while it’s a novelty. It would pull much more bitcoin maximalists than only bitcoin defi people and you can see it, yesterday Simon Dixon made an interview with Max Keiser and Samson Mow about the volcano bonds and in that video you clearly hear the opinion of one of the most bitcoin maximalists out there, about bitcoin defi and staking tokens to earn yield in bitcoin. The more we get into hyperbitcoinization more people will be looking to yearn yeild on bitcoin, Sovryn should have some bitcoin mining yield projects by then.
just my 2 sats about this.
