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November 10, 2020

Market Spotlight

Enabling DeFi for bitcoin with IOV Labs and Money on Chain


Much of the hype surrounding DeFi has been on Ethereum-based projects. But RSK, which was founded in 2015, was in decentralized finance before DeFi became the force that it is today. Teana Baker-Taylor spoke with Gabriel Kurman, master advocate at IOV Labs, the company powering Bitcoin-a stablecoin collateralized by bifueled RSK, and Manuel Ferrari, co-founder of Money On Chain, which is behind tcoin and which incidentally is precisely what RSK built its platform for.

RSK’s Gabriel Kurman discussed how far the company has come and where it is today, saying,

(33:01) “From the beginning, the whole idea of merging the benefits from Bitcoin and Ethereum was to make sure that we developed a DeFi ecosystem, a financial system, that was so efficient and so programmable that it could be used by any person around the world. And after almost five years of building this, we are quite excited about what’s happening and what’s going on in the space right now. From a technical standpoint, we reached around 50% of total Bitcoin merge mining, securing the RSK blockchain. So this is a huge milestone and we’re always super grateful to all the Bitcoin miners that are ultra securing smart contracts and enabling DeFi for bitcoin because this is them providing the security…We also launched…an Ethereum bridge with RSK. So now projects such as Chainklink and Dai are also making their tokens available on the RSK ecosystem through this RSK/Ethereum bridge.”

Money on Chain is behind a trio of tokens/actors, including the Bitcoin Stablecoin, Income for Bitcoin Holders and Leveraged Bitcoin. Manuel Ferrari explained,

(36:17) “The stablecoin is running on RSK. It’s the first 100 percent bitcoin collateral stablecoin. And it has other qualities…(37:37) It’s a completely different financial model behind the smart contracts [vs. Dai and MakerDAO.] It has three main tokens or three main actors with different use cases. Of course there is the stablecoin; which is the dollar on chain, which as I mentioned is 100 percent backed by bitcoin and only bitcoin. Then we have a token which is a liquidity token which is called BPRO. The BPRO is a token which is meant for bitcoin holders and it has a little bit of leverage that usually is between 1.05 and 1.20. So it has free leverage, which is actually something that anyone would like in a token like bitcoin if you are bullish on bitcoin — well, why not get free leverage on a bullish asset? And on top of that it has what we call, passive income. It gets part of the fees of using the platform, anyone who uses the platform has to pay a very small fee. Part of that goes to the liquidity providers, which are the BPRO holders and also it gets also part of the governance token…So it has several income sources to be a very interesting token for bitcoiners. So it’s a DeFi token meant for bitcoin holders.”

Teana Baker-Taylor asked RSK’s Gabriel Kurman about how the upcoming release of Ethereum 2.0 will impact projects, in response to which he said,

(44:14) “It’s quite interesting now. It’s super challenging for Ethereum to move to 2.0 and change completely from proof-of-work to proof-of-stake. And I know for a fact that many projects running only on Ethereum are quite concerned about how that will affect their projects. In that sense, RSK has been built following Satoshi’s advice and way of seeing the world. So we believe in immutability and not rolling back a blockchain but also not changing the rules in the proof-of-work for the projects deciding to build..on-chain on top of RSK. Absolutely, RSK can be an option. It’s an option now. And we don’t see the world that you have to choose between one or the other. We believe that very important projects in the DeFi ecosystem should hedge themselves, should make sure that the projects and the users are safe regardless of what happens at an infrastructure level.”

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Gerelyn Terzo
Gerelyn caught wind of bitcoin in mid-2017 and after learning about the peer-to-peer nature of Satoshi's creation has never looked back. Previously she covered institutional investing and fintech for several major trade publications. Gerelyn resides in Verona, N.J.

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