Bitcoin layer-2 protocol Sovryn is expanding to the Ethereum blockchain with help from Ethereum Virtual Machine (EVM) developer Build on Bitcoin, the companies announced on Thursday.
Sovryn was launched in late 2020 as a decentralized platform providing lending, borrowing, and margin trading through smart contracts in the Bitcoin ecosystem. Built as a DAO on Rootstock (RSK), a Bitcoin sidechain that allows for the creation of smart contracts, Sovryn has been working to enhance Bitcoin with advanced DeFi features.
The first project Sovyrn will launch at Build on Bitcoin is a decentralized exchange (DEX) called Dex 2.0. The group claims the project will offer lower gas fees, faster transactions, and “unparalleled capital efficiency” than competitors such as Uniswap.
“We have known Sovryn for a long time, and they have certainly driven a lot of the early DeFi work in the Bitcoin space,” said Build on Bitcoin co-founder Alexei Zamyatin. decryption. “Egan was the first person I called when we started working on (building on Bitcoin). He tried to get me excited about scaling the Sovryn ecosystem and learn about the challenges they were experiencing.”
Layer 2 protocols refer to technology designed to alleviate blockchain congestion by creating a secondary chain that operates 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.
“Build on Bitcoin allows you to use 350 (Ethereum virtual machine) wallets,” Zamyatin said. “For the non-expert, this means you can choose almost any wallet. You don’t necessarily have to use only Bitcoin or handle UTXOs. This makes everything much more user-friendly.”
Last January, Sovyrn launched BitcoinOS, creating a base layer for decentralized apps (dapps) on Bitcoin using what the company calls “sovryn rollups.”
“By working with BOB, we are not only expanding Sovryn’s reach, but also creating a DeFi ecosystem that will be accessible to millions of Bitcoin users around the world,” Sovryn co-founder Egan Yago said in a statement.
Zamyatin explained that Sovryn’s Dex 2.0 will allow users to select a variety of networks through a user interface such as the BOB Ethereum layer-2 protocol. He noted that the selection process is similar to choosing between Ethereum, Optimism, and Arbitrum on Uniswap.
When asked why developers are focused on bringing DeFi to Bitcoin, Zamyatin said it’s because of Bitcoin’s reliability.
“Bitcoin is the backbone of the entire Web3 ecosystem. When Bitcoin goes down, everything else goes down, and when everything else goes down, Bitcoin is still there,” he said. “I think that’s one of the key characteristics of Bitcoin: It’s stable and robust. Bitcoin is predictable.”
With renewed interest in the #1 blockchain by market capitalization due to projects like Ordinals and the approval of the Bitcoin ETF, Zamyatin is optimistic about the future of Bitcoin development.
“Bitcoin went through a difficult time when no one wanted to participate in it,” Zamyatin said. “We both had the feeling that there was going to be a renaissance, and luckily we were right.”
Editors: Ryan Ozawa and Andrew Hayward
