My experience using Smarter Bitcoin rBTC and Sovryn DEX. DeFi is now possible with Bitcoin BTC.

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2 years ago

I have decided to move all of my money into Bitcoin BTC DeFi, wh111ich is now possible to utilize sidechains. RSK is the protocol used to implement the sidechain, and the sidechain implements merge mining, which means miners mine regular Bitcoin and the sidechain. And the bridge at the moment is centralized because it utilizes a federation peg which pretty much means corporations control the peg-in and peg-out. In comparison, this will be similar to what SmartBCH is doing with CoinFlex.

Eventually, the bridge between Smarter Bitcoin and regular Bitcoin will be decentralized once a secure bridge is built. Readers from this community understand it will be the equivalent of SHA-Gate. In the case of Bitcoin, it will indeed have a different name similar results. In both networks, the bridge is being run by corporations, but also Smarter Bitcoin is implementing hardware solutions to the mix. Still, you could argue that it is not decentralized since you have to rely on bridges that could be compromised. But I think this will be solved in the future, not only for RSK but also for SmartBCH.

I went straight to the point and started utilizing the network by first exchanging my money into Bitcoin and then utilizing centralized options to get into rBTC, similar to wagon.cash. I was expecting fees to be high when using Smarter Bitcoin, and indeed I was not wrong transaction fees are high not only because the price of Bitcoin is high, but because smart contracts transactions require a lot of gas.

But in terms of satoshis, Bitcoin DeFi is as expensive as Smart Bitcoin Cash is; what I am trying to say is that if Bitcoin Cash were as expensive as Bitcoin, you would be paying the same amount of dollars. I spent 0.001BTC to do some transactions on the network. I swap my BTC for Sovryn, approve the contract, and add liquidity to a pool and start farming, and the next day I claim my rewards which means harvesting; those four transactions cost me 0.001 BTC. In the case of SmartBCH, doing the duplicate transactions will cost you the same amount, 0.001BCH; the only difference is that Bitcoin cash is much cheaper, so you feel like your transaction cost is much more affordable, but in terms of satoshis, it is about the same.

Another thing is if you invest around $10,000 in SmartBCH, you will be getting around $30 to $50 in interest; if you invest your money into Mist or any other DEX token, with Bitcoin, you will only get up to $10 a day. Your reward won't be enough to pay for the transaction cost, meaning you will have to leave your claims or harvest untouched until you have enough rewards to be worth your transaction cost. With Bitcoin Cash DeFi, you can harvest at almost any time because the transaction fees are so cheap that if you claim $10 every day, your transaction cost will not be higher than $0.10. In the case of Bitcoin, it will cost you at least $3.

The only advantage you will have is that you are utilizing Bitcoin instead of any other altcoin, and that could be a plus in the future once enough people realize you can use DeFi with Bitcoin. Still, an influx of more people will only mean that transaction costs will only increase in the future, and the Bitcoin community is Okay with having high fees. Hence, I expect fees to go sky high at some point, and the only saving face is that you are utilizing the Bitcoin Network on a pegged sidechain.

Now the DEX is Sovryn, and the total supply is only 100M. In the long term, the token could have a better price than most SmartBCH dexes, for example; Mist already has 330M, and it is increasing in value; meanwhile, Sovryn is a cap at 100M, but that could change if the whole community votes and decides to inflate the supply away but you'll need 80% of the holders to agree on that, so probably that will never happen. In the case of DEXes, Sovryn has a better supply because it has a hard limit; in the case of SmartBCH Mist, and Tango doesn't have a ceiling when it comes to total supply, maybe that could be another reason to experiment with other projects.

Conclusion.

I moved my money to Bitcoin DeFi because I wanted to experience it first hand and learn new tricks. Because to me, nothing teaches me better than to practice it on my own and understand the protocol by actually using it. If you have less than $5000.00, I wouldn't recommend getting into farming or the whole network because transaction fees could eat into your profits, especially if you are only going to get in for a short while, but if you want to learn, you could start with as low as 0.01BTC.

Will I come back to SmartBCH?

Probably I will say once I am fed up with the transaction fees. Once I have learned everything, there is to know about Smarter Bitcoin and remember in reality, and I can get out any time I want because I control my keys and am not using centralized services. I don't need any permission; for all I know, I can come back to SmartBCH right after writing this article.

Update!!

"A PowPeg is a multi-signature management system where participants' nodes have no direct access or control over private keys. Keys are controlled by tamper-proof HSMs. These HSMs internally run lightweight RSK nodes which obey commands originating from an RSK smart contract called the Bridge that orchestrates peg-outs. Only when such commands are confirmed by thousands of blocks produced by the mining network does the HSM proceed to sign peg-out requests. The PowPeg is new security protection layered on top of the previous federation. It is unique in the crypto ecosystem and radically reduces the attack surface for the most frequent security breaches. The RSK community has collectively decided on a strategy for increasing the security of the peg based on defense-in-depth: Adding more security layers on top of existing ones, protecting the system from the failure of any of them. The ultimate goal is the complete decentralization of the peg. Refer to the Security Model for the details around the security model of the 2-way peg."

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Update!!

"A PowPeg is a multi-signature management system where participants' nodes have no direct access or control over private keys. Keys are controlled by tamper-proof HSMs. These HSMs internally run lightweight RSK nodes which obey commands originating from an RSK smart contract called the Bridge that orchestrates peg-outs. Only when such commands are confirmed by thousands of blocks produced by the mining network does the HSM proceed to sign peg-out requests. The PowPeg is new security protection layered on top of the previous federation. It is unique in the crypto ecosystem and radically reduces the attack surface for the most frequent security breaches. The RSK community has collectively decided on a strategy for increasing the security of the peg based on defense-in-depth: Adding more security layers on top of existing ones, protecting the system from the failure of any of them. The ultimate goal is the complete decentralization of the peg. Refer to the Security Model for the details around the security model of the 2-way peg."

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