News & Updates

SIP-0037 goes to vote: The Sovryn Mynt

November 4, 2021
min read

SIP-0037: The Sovryn Mynt - is now live for voting in the Sovryn Bitocracy! Have your say in the future of Bitcoin backed stablecoins. Voting will be live for 24 hours from the time the voting begins.

What is SIP-0037 looking to solve?

There are four significant problems facing existing stablecoins;

  1. Many stablecoins today rely on central intermediaries which bring a whole host of issues;
  2. Government crackdown leading to loss of funds
  3. User addresses get blacklisted because of “suspicious” activity
  4. The SEC decides to sue Tether and seize funds
  5. User funds get locked without notice - and they can’t move them until they go through a KYC procedure
  6. Many are backed by collateral that is inferior to BTC. (e.g.) $USD
  7. Instability - The stablecoin can end up trading above or below the peg due to volatility
  8. Shallow liquidity - Depending on the single stablecoin, liquidity can get very low

These issues compromise the stability, trust and predictability of the coin.

How does SIP-0037 solve this?

Sovryn Mynt will be the protocol that mints the Sovryn Bitcoin-stablecoin. The contract will aggregate different methods of creating BTC-backed stability. Various Bitcoin-backed stablecoins will be deposited and held by the contract, which will mint the aggregated stablecoin. This stablecoin will also be redeemable for the Bitcoin stablecoins held in the Mynt pool and Bitcoin itself.

There are four significant advantages to an aggregator of this kind:

  1. Decentralisation - The Sovryn Bitcoin-stablecoin is completely decentralised and completely evades regulatory capture
  2. Pristine Asset - the Sovryn Bitcoin-stablecoin is backed by the most pristine digital asset in existence; Bitcoin
  3. Greater Stability - any single method of creating stability has situations where it may become volatile in comparison to its peg. In those circumstances it can end up trading above or below the peg. Having a system backed by multiple, different methods of achieving stability dampens that effect, providing greater overall stability.
  4. Concentrated Liquidity - As we have already seen with XUSD and ETHs, concentrating the liquidity of, what would otherwise be, many different tokens representing the same asset means one deep pool of liquidity, instead of many shallow ones. This allows for smoother, lower cost trading and reduced transaction frictions.

The first BTC-stability protocols that will feed into the Sovryn Mynt are Money on Chain (MoC) through the DOC token and Zero through the ZUSD token (scheduled to launch later this month).


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Why does it matter?

Truly decentralized, Bitcoin-backed stablecoins are perhaps the single most necessary tool for the continued transition away from fiat.

  • They provide everyone with global access to borderless money that is stable enough to use for everyday transactions. They are dollars, but uncensorable. They are Bitcoin, but non-volatile.
  • They reduce reliance on the gateways and further limit the capacity for the old system to control or hinder the new.
  • The dollar is familiar and needs little explanation. Millions of people who would be reticent to otherwise use Bitcoin, can use stablecoins for their day-to-day economic activity.

There is perhaps nothing the Bitcoin ecosystem can offer that will do more for financial inclusion than providing stable money, backed by sound money.

The Sovryn Mynt protocol will initially be governed by the SOV Bitocracy, while the Sovryn Mynt treasury will be governed by the MYNT Bitocracy.

This bootstrap event for Sovryn Mynt will occur on the Sovryn Origins Launchpad

  • Have your vote on whether SIP-0037 should pass or be rejected in the Sovryn Bitocracy here
  • See the discussion around SIP-0037 on the Sovryn Forum here
  • See the proposed SIP word-for-word in GitHub here, but most importantly:



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