Stablecoins, which are designed to protect investors against volatility in the crypto market have been extremely popular over the past few years. These coins can be used in many different ways and are available on multiple blockchain platforms.
Until recently, stablecoins, decentralized finance (DeFi), non-fungible tokens (NFTs), and other similar smart contract-powered primitives weren’t available on the Bitcoin network. RSK was the first secure smart contract platform on the Bitcoin network. This means that Bitcoin enthusiasts can access all the DeFi opportunities, including those for stablecoins.
Bitcoin (BTC), currently the most popular cryptocurrency, is considered to be liquid. Bitcoin (BTC) already boasts the highest market capitalization, and has the largest user base. Stablecoins have the ability to leverage the unique features of Bitcoin’s blockchain. This includes decentralization and censorship resistance as well as immutability and unsurpassed security. The counterparty risk associated with stablecoins is also reduced when BTC serves as collateral.
RSK: Goliath in the Making
RSK (Russian Smart Contracts) is one platform that levels the playing field for Bitcoin lovers as Open Finance (OpFi), grows. There was a significant increase in the number of users joining RSK’s smart contract ecosystem in 2021, sending the amount of BTC pegged into RSK from 546 to 2,520 – a promising development when considering that DeFi is still at its nascent stage on the Bitcoin blockchain.
RSK also created an interoperability Bridge with Ethereum in order to further extend its DeFi offerings. It allows two-way transfers of any token between RSK’s and Ethereum ecosystems. This bridge allows Ethereum users to seamlessly transact using rBTC and gain indirect exposure into the Bitcoin DeFi ecosystem. RSK users can also benefit, particularly if they use Ethereum-based stablecoins (e.g. DAI).
Bitcoin DeFi is the next major leap in DeFi 2.0. In this context, RSK, with its suite of stablecoins and DeFi products, paired with the Bitcoin network’s time-tested security and liquidity, has positioned itself as the go-to solution for developers looking for alternatives to Ethereum’s rising problems.
Technically, RSK supports full EVM compatibility. This means developers can easily port Solidity-based decentralized apps to Bitcoin. Developers can leverage both the RSK and Bitcoin features through the two-way peg.
Ethereum offers 30 TPS for scaling (transactions per seconds), but this can be increased depending on network congestion. RSK provides up to 100 transactions per second without any reduction in storage space and no compromise on decentralization. RSK’s gas fee is 42x higher than Ethereum’s.
Security is a concern for most blockchain networks which follow the Proof-of-Stake consensus method. This can be seen from recent DeFi platform hacks. However, Bitcoin ranks as one of the most secure networks because any party that controls at least 51% or more of the Bitcoin network’s hash rate can take over it. With the increasing hashrate, this becomes more challenging. RSK’s hashrate is approximately 50%, making it the most secure smart-contract platform for defending against 51% attack.
Diego Gutierrez Zaldivar (Co-founder of RSK, CEO of IOVlabs) explains the advantages of stablecoins linked with BTC. “Bitcoin is the most liquid crypto asset, and it’s recognized as a store of value. It is therefore the most reliable form of collateral you have. If you use a stablecoin such as USDT, you’re prone to third-party risk.
RSK’s strength lies in a combination of features that we can potentially achieve: top security, high decentralization, high scalability, and low cost.”
RSK has amassed an TVL (Total Value Locked), of over $134million, to date. It hosts many of the highest-performing stablecoin programs like MoneyOnChain(MOC), Sovryn (SOVRYN), and BabelFish (among others).
MoneyOnChain’s primary asset is the Dollar on Chain stablecoin (DoC). It is collateralized at a 1:1 ratio with BTC, positioning it among the best collateral since BTC’s liquidity backs it. Then there’s the RIF Dollar on Chain (RDOC), one of the primary assets offered by the RIF On Chain DeFi platform. RDOC utilizes the RIF token to secure its collateral. It is pegged at 1:1 with the US Dollar.
The RSK ecosystem houses the USD-pegged stablecoin XUSD from cross-chain protocol BabelFish. The XUSD stabilitycoin acts as a distributed aggregator of stablecoins. It can also be used for redemption or exchange at a 1:1 ratio to any other stablecoin, as per the underlying smart contract.
With RSK’s rDAI stablecoin emerging as an alternative to Ethereum’s high transaction fees, you can convert DAI for much lower gas fees (approximately 15 cents per transaction), making it about 80 times cheaper than transacting DAI over the Ethereum network. These features are not the only ones available in the RSK ecosystem. The BRZ stablecoin is also found within the RSK ecosystem. It is pegged at 1 with the Brazilian Real.
Blindex, which is a DeFi-based multi-currency stablecoin def platform, has also launched a range of stablecoins tying to assets using smart contracts RSK. These stablecoins also know as BD-Stables. They are pegged 1:1 with the underlying currencies. For example, if a BDStable is pegged to USD it will be represented as bUSD. It is the Australian Dollar.
The DeFi ecosystem has seen many changes over the past few years thanks to the development of emerging technologies. Stablecoins, as one of the strongest pillars of the crypto market, will play a critical role in the ongoing transition to DeFi 2.0, especially now as they have finally found their way into the Bitcoin ecosystem, thanks to RSK’s smart contract capabilities.