Do not buy the Bitcoin DeFi Sovryn token before reading this warning.

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Avatar for francis105d1
2 years ago

The Bitcoin DeFi has Sovryn DEX and token (SOV) as a decentralized exchange, you can farm like any other protocol with the DeFi name. But here are the differences that make Sovryn a bad idea;

One transaction fees are not free; you will be looking to pay from $0.5 up to $20 for a single transaction; swapping assets can cost you $0.50, but claiming your rewards can cost you $20. That transaction fee can cost you more in the future. Those fees will only increase as more users appear on the RSK network. Since the Bitcoin network is happy with high fees in the primary network, you won't get any help on the RSK side either since they already agree that high fees are reasonable. Just like the Ethereum community.

If you managed to farm which you will need at least $5000 to justify the fees to start the process, you would soon find out that after waiting, you can't use your rewards right away, yes you are reading fine, you can't use your harvest money right away, you must stake it, and your funds won't be valid until ten months have passed.

This gimmick is used only on shittoken projects where those providing liquidity only wants you in but not out, and it is a way to lock up your money within their system while those providing the LP get dumped on. I have seen this gimmick in many tokens that, in the end, fail; your project is good, you don't need to force users to stay.

And the last part is that stakers have decided to vote themselves in for more money. They have decided to take a raise by removing 50% of the fees that LP farmers receive and giving it to themselves. This is pretty much voting yourself to a raise which is not fair because LP farmers can't vote while their money is locked within a farm. Stakers said that is fair because their harvest gets vested, which in turn means more voting powers but it is not fair because vested coins can't be used right away you have to wait ten months to use your rewards.

In other words, those providing LP get the worth deal and pretty much lock their money on a system that takes their income by the power of voters and doesn't let them use their income right away. Those issues are written within the documentation, but you have it in just three minutes if you don't have time to read too much now.

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2 years ago

Comments

Hey Francis, really nice article. I also read your first article about Sovryn too. These days, people are being irrational under the influence of a magic word: DeFi! DeFi is an absolutely amazing technology, but not every DeFi application is good. Therefore, SmartBCH is a project with great potential, with low gas fees, fast blockchain technology, easy development and robust community. Thank you for your article and have a nice day! 😊

$ 0.05
2 years ago

I write as I go pretty much what I write is my own experience, and that way I can keep myself true to what I say and readers know that what they are reading is just my point of view nothing more, and use what I have learned to improve whatever goals the readers may have.

Make no mistake I haven't sold my position just yet and I am not coming back to SmartBCH just yet, but I think once I am done with Sovryn I will look to get in again.

$ 0.00
2 years ago

Well, when you are ready, SmartBCH will be there for you 😉

$ 0.00
2 years ago