We are all here because we believe in the long-term viability of Sovryn as a project because it allows us to be custodians of our Bitcoin. We trust the security of the Bitcoin network and RSK, which is why the project was launched here, rather than anywhere else.
The reason SOV shouldn’t be on Ethereum is the same reason Sovryn never launched on Ethereum. Sovryn is a Bitocracy - a distributed autonomous organization secured by Bitcoin Proof of Work - not an Ethocracy.
I am a big fan of Uniswap and the decentralised exchange space, however, I am cautious about the pending launch of eSOV on the Ethereum blockchain. Whilst exposing the project to more eyes, my concerns lie around the fact that many Uniswap traders are mere speculators and are not interested in the fundamentals of a project - the opposite of all the people here who have taken the time to understand the RSK blockchain and transact upon it.
The SOV utility and velocity has not been developed enough, even for RSK
What can you do with SOV? You can:
- Stake to earn fees from the system
- Vote on proposals
- Delegate voting power to other users, while still, of course, owning your staked SOV and accruing fees
What CAN’T you do with SOV? (Yet)
- Get rebates from trades
- Get early allocations from projects on the Origins launchpad
- Stake to earn rewards on top of fees
- Much more
The point being - SOV’s utilities are not developed enough to consider spreading it as a naked asset to other chains - where all you can do with the token is buy or sell. You cannot vote with eSOV. You cannot stake eSOV. It becomes a dummy token.
To me - Sovryn is a Bitcoin Layer 2 project, and spreading SOV to other chains prematurely will dilute our most important message - that Sovryn is DeFi secured by the Bitcoin network.
We also need to make sure we do all in our power to bring users to the Sovryn App - rather than allow trading to be done off-platform, as this does not benefit the Sovryn ecosystem at all.
“So what do we do, then?”
As we move to a cross-chain world, SOV on other chains is an inevitability, but other assets that exist on other chains can also exist on SOV, and this is what we should build our mental models around. The bridge from ETH is a necessity, however, users should be incentivised for providing liquidity on rETH/SOV on the Sovryn protocol, rather than eSOV/ETH on Uniswap.
We are here at the start of a new Ecosystem around SOV, and we should be thinking about other services around the DeFi on Bitcoin narrative - things like incubating new projects, trading rebates, or airdrops based on locking/staking duration - all of this will happen, as long as value is accruing to the SOV token, on the SOV platform.
SOV has already achieved over 40m in volume, from dedicated users like you and me who care about the long term viability of this project - as the application is developed and the ecosystem matures, there is no reason we can’t attract more liquidity to this platform, without incentivising activity on other chains.
Signed, Satoshi Nakameowdough
Twitter - @Nakameowdough