January 2022 Sovryn Letter

Sovryn accomplished a lot in 2021. When we started there was almost nobody who believed that Bitcoin sidechains had much of a future. Both RSK and liquid had been around for many years and had failed to achieve much traction.

Yet, in the space of just one year, Sovryn went from a handful of developers to a vibrant and growing ecosystem with multiple teams building multiple projects. Over $2B in assets have been transacted, tens of thousands have used the system, and more than thirteen thousand users are staking and participating in governance.

I think it's fair to say that no other protocol in the Bitcoin ecosystem has ever seen such growth.

It is still year 0 for Sovryn and the Bitcoin-native economy. Every few months the narratives and buzzwords in crypto change dramatically. But on longer time scales, certain things are clear. Bitcoin is here to stay. As almost every other institution in the world loses trust - understanding of, and faith in, Bitcoin only grows. Our lives and economic activity are increasingly becoming digital and untethered from geography.

Sovryn and Bitcoin exist in an extremely competitive and fast-paced environment. Substantial resources are being devoted to crypto: building technology and attracting traffic, communities, and liquidity. As chains and projects proliferate, Sovryn will remain focused on extending its leadership position as the operating system for the Bitcoin-native economy.

Our focus must remain on the long term. The process of transitioning to a digital economy with cryptographically-enforced property and contracts will take decades to play out. Bitcoin is the clear leader in the crypto ecosystem. Sovryn is becoming the clear leader in the Bitcoin ecosystem. If Sovryn can help solidify and extend Bitcoin's leadership, then Sovryn will create immense value.

Bitcoin is the asset of low-time preference: Sovryn echoes this long-term thinking. Sovryn is being built to last, with security as the first priority. Sovryn will continue to focus on building systems that can deliver sustainable value while allowing users to transparently manage risk.

If DeFi has emphasized "get rich quick", Sovryn should offer a "SlowFi" alternative - sustainable tools for growing and preserving wealth reliably. Millions of people now hold bitcoin as a significant part of their wealth, millions more will join them in the coming years. Over the coming years, Sovryn will create the products to allow these millions, individuals and institutions alike, to put their bitcoin to work - creating long term, sustainable value.

The SlowFi approach may mean that Sovryn appears to grow more slowly than other platforms and ecosystems. This is acceptable, if it is on a risk-adjusted basis. However, we must never let that become an excuse for sloth. Sovryn may be running a marathon, but we must do so as a series of sprints. Speed is important because our leadership position is not inevitable. It is a function of our ability to stay at the frontier of innovation and deliver tools that provide users with economic sovereignty.

Building the operating system for a world built on Bitcoin is a big, ambitious goal. To get there, Sovryn must first become the easiest, safest and most powerful way to use your Bitcoin. We are well along the way to getting there.

With Sovryn, users can trade, lend and go-long Bitcoin, without giving up custody of their keys or their privacy. As fiat on-ramps and integrations with wallets, lightning and third-party services improve, Sovryn will also become the lowest-friction, most convenient way to put your Bitcoin to work. This is the path to mass adoption.

This coming year, several key primitives will be rolled out - BTC-backed stablecoins, zero interest lending and perpetual swaps - that will allow for a variety of Bitcoin-focused SlowFi products that allow Sovryn to offer compelling products offered nowhere else.

The Sovryn community is at once extremely hardcore, yet friendly and welcoming. I have been blown away by the maturity, intelligence and conviction displayed. Sovryn is attracting the right type of people for pioneering the institutions of the future. We must continue to empower this community by building and improving the tools of collaboration and collective decision making.

We will continue the build-out of Sovryn infrastructure, with a focus on bringing smart contracts and tokens to the Lightning Network and scalability.

On the product side we expect to focus on Bitcoin-backed stablecoins, Zero and perpetual futures during the first half of the year. This will allow Sovryns to do more with their bitcoin than simply HODL, without taking on the risks of custodial services and 'ponzinomic' schemes.

During the second half we expect to take advantage of the improved scalability infrastructure to introduce significant improvements to trading and lending.

Throughout, we will continue to roll out tools to improve the decentralization and community involvement in the growth of the ecosystem. Additionally, we will continue to work to improve the ease with which third-party systems can integrate with Sovryn.

Would you like to present your feedback on our 2022 strategy?

Do you have ideas that can get us to the next 1M users?

Join us on Monday, January 24th, to discuss our strategy for 2022, subprotocols, and marketing!