A startup has launched a leveraged token and a decentralized stablecoin based on Bitcoin (BTC)-powered RSK and its second layer solution Infrastructure Framework layer (RIF).
According to an announcement shared with Cointelegraph on April 21, Bitcoin-based decentralized finance (DeFi) protocol MoneyOnChain launched the new products on RSK’s sidechain.
A DAI competitor on Bitcoin’s blockchain
The new DeFi platform, dubbed RIF on Chain will feature RIF Dollar (RDOC), RIFX and RIFpro (RPRO). RPRO is a token that mirrors the price of RIF but also grants passive income by collecting a share of the fees generated by platform transactions.
RDOC is pegged to the United States dollar and backed by RIF, the tokens powering RSK-based decentralized applications. Unlike competing Ether (ETH)-backed decentralized stablecoin DAI, RIF Dollars can be acquired directly by spending RIF without creating a collateralized debt position.
The RDOC stablecoin is minted every time there is a certain amount of RIFpro staked on the platform. Lastly, RIFX is a token that gives exposure to RIF’s price fluctuations with leverage. Max Carjuzaa, MoneyOnChain CEO, 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.”
A Bitcoin-based system
Carjuzaa pointed out that RSK is merge-mined with BTC and leverages Bitcoin’s blockchain for security. He also explained that Bitcoin as an asset is integrated into the system and its role will be expanded 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.”
As Cointelegraph reported in March, lead developer at blockchain firm Kava Labs Ruaridh O’Donnell pointed out that there is great anticipation for the development of Bitcoin’s DeFi ecosystem. When it comes to the broader DeFi space, it is seeing great developments at an astonishingly fast rate.
As Cointelegraph reported earlier today, Ethereum-based DeFi protocol Synthetix recently enabled tokenized real-world assets like Brent oil and the Nikkei stock index. The CEO of blockchain firm Trustology recently said that he believes DeFi protocols could soon emerge as the world’s dominant liquidity pool if scaled effectively.