Suggestion for SOV utility

I know there is talk about using BTC as the base for all trading pairs on Sovryn.

I would like to instead propose another idea which is to price every coin that is listed on Sovryn in BTC but to use SOV token as liquidity for all pairs in the way projects like Thorchain work.

Sovryn is already infrastructure and the Thorchain model gives deterministic value to SOV that is tied directly to BTC’s value if all the value on Sovryn is priced in BTC.

Furthermore, this would enable cross chain functionality in the future as SOV can exist cross-chain in a way the Bitocracy can control (look at what Elk finance is doing). I’m not a dev so I don’t understand the technical feasibility behind such a suggestion but I wanted to put this out there for feedback.

Thank you for reading.


Do you mean trades in the AMM would be against SOV, but priced in BTC?


And thank you for responding Yago!

Looking forward to hearing your thoughts =)

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I am neither a dev nor a crypto expert, but my common sense likes this idea. Why? My understanding of Thorchain is that their model dramatically reduces the need for countless liquidity pools and thus increases the depth of the ones needed. Right? Since Sovryn is a fairly small ecosystem still, wouldn’t that also benefit us?

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I’m not sure I understand the advantages of trading every asset against SOV. You want your liquidity pools to be as deep as possible, and I would think more people would be willing to contribute liquidity if one side is rBTC than if one side is SOV. Also, you would have some ambiguity (or variation) about price because you’d have to convert everything to rBTC, which would vary depending on depth of the LP for SOV/rBTC.

In response to marcusaurelius, I do think one side of every pool needs to be the same asset, which Sovryn is already doing. Then you can trade any pair by making two underlying trades – a trade between Asset 1 and rBTC (or SOV) and then a trade between rBTC (or SOV) and Asset 2. That way you only need one liquidity pool per asset rather than n(n-1) for every possible pair. The downside is that it would mean double the fees for pairs that don’t involve rBTC (or SOV) because it would be two trades. I don’t know if there’s a way to circumvent the extra fees. This may be irrelevant to your point, but I thought I’d mention it just in case.

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You’ve got a good point but it also raises a question of whether a BTC pairing will be the pair with the most liquidity. Some might not like the idea of risking their RBTC in a LP and would rather have SOV. Having SOV would also enable cross-chain capabilities.

My perspective is that people who don’t want to risk their rBTC in an LP would also not want to trade their rBTC for SOV to put it in an LP. It’s all about opportunity cost.

Can you explain how SOV would enable cross-chain capabilities in a way that BTC wouldn’t? I’m not familiar with the technicalities.

Well the SOV token is something the bitocracy has control over whereas RBTC is not. I’m not a dev either so I don’t know about the technicalities but it would seem to me that you wouldn’t just be able to burn RBTC on one chain and mint it on another chain like you could do with SOV (at least not by the Sovryn Bitocracy alone).

For SOV to be a good cross chain liquidity facilitator, it would likely need to have its own chain. There’s a reason Rune moved to its own chain rather than staying an ERC20.

Rather than rebuilding an entire crosschain liquidity infrastructure, why not looking into integrating existing ones? For example, why not pushing for a RBTC-RUNE pool on Thorchain?

That would require to talk to and convince ThorDevs (I have and from what I’ve seen they are not super stoked about it). I know a certain @ AleC on discord have been looking into it as well.

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if it’s technically possible, I would push for that pool on Thorchain also. I keep reading from Bitcoiners on Twitter that it seems to be the most decentralised and thus trust minimised swap for native BTC into other native assets without the need for a wrapper. Sovryn needs allies like Thorchain and hace access to / be part of existing and growing cross chain liquidity infrastructure.

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