A startup launched a leveraged token and a decentralized stablecoin on Rootstock (RIF), a blockchain-based smart contract solution based on Bitcoin (BTC).
Bitcoin-based, decentralized finance (DeFi) protocol MoneyOnChain launched the new products on the sidechain of RSK, according to an announcement.
RIF Dollar (RDOC), RIFX, and RIFpro (RPRO) will feature the new DeFi platform, dubbed RIF on chain. RPRO is a token that mirrors the RIF price but also grants passive income by collecting a share of the fees generated by transactions on the platform.
RDOC is pegged to the US dollar and supported by RIF tokens. Unlike competing decentralized stablecoin DAI backed by Ether (ETH), RID Dollars can be acquired directly by spending RIF without creating a collateralized debt position.
The RDOC stablecoin is minted whenever there is a certain amount of staked RIFpro on the platform. Finally, RIFX is a token that gives leverage exposure to price fluctuations in RIF. Diego Gutierrez Zaldivar, CEO of IOV Labs-the Rootstock company-explained:
“RIFX is a RIF leveraged decentralized long position. Based on an automated smart contract that renews every 30 days, the product has a leverage factor of 2X at the very beginning of its lifespan and a variable leverage afterwards based upon certain variables such as the price of RIF token and the amount of RDOC stablecoins in the ROC platform. Users must be aware of the risks. […] The ROC platform, in this current version, does not have a Margin Call notification.”
Bitcoin Integrated Into the System as an Asset
Zaldivar pointed out that RIF is merged with BTC and the Bitcoin blockchain is leveraged for security. He also explained that Bitcoin is integrated into the system as an asset, and will expand its role in the future:
“Bitcoins are locked on-chain and RBTC tokens are minted on the RSK network accordingly. RBTC (and thereby BTC) will serve as collateral for loans, as a pegging mechanism for RIF Dollar and more.”
Lead developer at blockchain firm Kava Labs Ruaridh O’Donnell pointed out that great anticipation exists for the development of the DeFi ecosystem for Bitcoin. It’s seeing great developments at an astonishingly fast rate when it comes to the broader DeFi space.
It is worth mentioning that the DeFi protocol Synthetix based in Ethereum has recently enabled tokenized real-world assets, such as Brent oil and the Nikkei stock index. The CEO of blockchain firm Trustology recently said he believes that if effectively scaled, DeFi protocols could soon emerge as the dominant liquidity pool in the world.