Bitcoin Layer-2 protocol Sovereign is expanding to the Ethereum blockchain with the help of Ethereum Virtual Machine (EVM) developer Build on Bitcoin, the two companies announced on Thursday.
Sovryn is a decentralized platform launched in late 2020 for lending, borrowing and margin trading through smart contracts in the Bitcoin ecosystem. Built as a DAO on the Bitcoin sidechain Rootstock (RSK), which enables the creation of smart contracts, Sovryn is working to enhance Bitcoin with advanced DeFi capabilities.
Sovir's first project to launch on Bitcoin Build is a decentralized exchange (DEX) called Dex 2.0. The group says the project will come with lower gas fees and faster transactions than competitors like Uniswap and “unparalleled capital efficiencies.”
“We've known Sovryn for a long time, and they've definitely been leading a lot of early DeFi work in the Bitcoin space,” Bitcoin founder Alexey Zamyatin told Decrypt. Egan was the first person I called when we started working. [Build on Bitcoin]Trying to expand Sovrin's ecosystem and get him excited about his struggles.
Layer-2 protocol refers to a technology designed to prevent congestion on the blockchain by creating a secondary chain that works in conjunction with the main network. For example, the Lightning Network is a Layer 2 micropayment protocol for Bitcoin. Other examples of layer-2 include Arbitrum and Optimism on Ethereum.
“You can use 350 in Bitcoin Build. [Ethereum Virtual Machine] “You can choose almost any wallet for the average person,” says Zamyatin. It doesn't necessarily have to be Bitcoin only or related to UTXO. It makes the whole thing user friendly.
In January, Sovyrn launched BitcoinOS, the company uses so-called “sovryn rollups” to create a base layer for decentralized applications (dapps) on Bitcoin.
“By partnering with BOB, we are expanding the reach of Sovereign and creating a DeFi ecosystem accessible to millions of Bitcoin users around the world,” Sovrin founder Egan Yago said in a statement.
According to Zamyatin on Sovereign Dex 2.0, users will be able to select different networks through the user interface, such as the BOB Ethereum Layer-2 protocol. He pointed out that the selection process is similar to choosing between Ethereum, Optimism and Arbitrum on Uniswap.
When asked why developers are focusing on bringing DeFi to Bitcoin, Zamyatin said it's because of Bitcoin's reliability.
“Bitcoin is the backbone of the entire Web3 ecosystem. If Bitcoin falls, everything falls, if everything breaks, Bitcoin still exists,” he said. “I think this is one of the main characteristics of Bitcoin – it is stable and strong. Bitcoin is predictable.”
With renewed interest in the number one blockchain by market capitalization, such as token projects and the licensing of Bitcoin ETFs, Zamyatin is optimistic about the future of Bitcoin's growth.
“Bitcoin has had a difficult time when no one wants to be involved with it,” Zamyatin said. We both felt a renaissance coming, and luckily, we were right.
Edited by Ryan Ozawa and Andrew Hayward.
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