Sovryn’s 0% Bitcoin backed Loans and Religious Morality
February 24, 2022 4:20 am Leave your thoughts
Where it started
Over a year ago now. When I read the white paper for the Sovryn protocol. I was convinced that I was looking at the holy grail of DeFi for many reasons some of which include:
It is grass roots and reminded me of Bitcoin.
It’s decentralized and strives to maintain and push for decentralization.
The Sovryn platform is censorship proof and does not require KYC.
Sovryn allows for free and open investing in new projects. (None of the lottery crap other projects are doing) Which leads to the next point.
It’s truly a free and open decentralized market place of ideas.
The SOV token being the governance token is ACTUALLY used for governance and people who are staking actually get to vote on the events of the protocol like a real government.
The team and community actually communicate with each other. The voices of the people are actually herd.
The community is active, engaged and involved. On the telegram, Twitter with regular Twitter spaces which have become quite popular, Reddit and usual crypto places but also within the SOV forums. People are actually discussing ideas and brain storming for the good of the project.
But also, when reading the white paper. I knew that this project was going to evolve to be more than just a DEX. It would evolve to be (as I have stated before in previous posts) an operating system and an entire ecosystem for Bitcoin. A Decentralized one with a decentralized government.
I was reading what could become the “Binance of decentralization” for a lack of a better term.
Where it’s going
Since then, the project has been built up and continues to be. It has also become what I thought it would be and more. But as I stated, I believe that it could become the “Binance of decentralization” and I do believe that it is and will continue to more and more over time.
Sovryn has developed an ecosystem with sub-protocols that are actually adding function and ease of use to the ecosystem. For example BabelFish, which is a stable coin aggregator. Because of BabelFish, you can swap stable coins with ease as it improves the interoperability between them. This is real infrastructure being built on the Sovryn platform. Which, I can attest to because I use it, and it works.
The ecosystem has also been improving the UI, making it easier to use. Working on things like the fast 2 way bridge in and out for BTC to RBTC and RBTC to BTC, limit orders for trading, launching Sovryn labs and more. They have truly done a great job developing the Sovryn platform and ecosystem.
But what’s next?
Bitcoin backed stable coins!
With this said. There is already a Bitcoin backed stable coin, called Dollar On Chain (DoC). However, DoC as good as it is, works in such a way that you have to sell your BTC to the Money On Chain (MoC) protocol. The MoC protocol would then issue you DoC. Simple enough. DoC also requires a higher amount of collateral for lending. We need more options for Bitcoin backed stable coins, ones that are more robust and with more options. Ones that are cheaper and more efficient but also allow more people to use them.
Bitcoin Backed Stable Coins
What is being developed here is Bitcoin backed stable coins that can be used for 0% interest loans. This is the beauty of the system because there are a lot of pro’s to the fact that the lending is 0% interest. This is one of the things that makes this so inclusive and available to the entire world to use. I will discuss this more further in this post.
First, let’s discuss what this could allow users to do. Anyone holding Bitcoin could use that Bitcoin to basically lend to themselves. So instead of selling Bitcoin for a stable coin (like when you buy Tether, USDC and so on). You could keep your Bitcoin, Collateralize your BTC and grant yourself a loan. This loan would be a 0% interest loan and the loan is open ended, forever. Look at it more like a line of credit that can be added too, or paid down.
Furthermore
So lets say you take a line of credit on a Bitcoin while the price of BTC is $50,000, and the price of bitcoin keeps going up and ends up being $200,000 per BTC, your line of credit can grow, or you could simply pay off your loan and it would be super cheap because you still own the BTC that the loan was borrowed against at 50K.
This line of credit could be liquid cash that can be used for anything. Instead of going to a bank to get a loan for a car, mortgage for a house or just a little cash to keep a nice float to get day to day things done. Some dollars for trading more crypto, whatever you need.
Using the Sovryn platform, you could also take that line of credit and trade for USDT or USDC (which behind the scenes the BabelFish Aggregator does the work and automates the process) which you could then turn into local FIAT of your choice.
But let’s shift this discussion away from the technicalities and more to the human aspects of this. Like I said before, there are a lot of Pro’s to the fact that these loans are 0% interest.
Religious Inclusivity
I have always been a study of human nature, with this, I study many different religions in the quest to understand humanity more in-depth. I respect all religions and try to understand the reasons and meaning behind their various rules and outlooks. When I got into crypto, one of the things that I was curious about, was if different religions were okay with the use of Bitcoin and other cryptocurrencies. What I found is that the answer is not as easy as crypto people might think. Think of it like this. Is it okay to use money? Of course! But there are many things that can be done with money, some good and some bad.
The same is true with crypto. The use of Bitcoin and other cryptos are okay but there are certain actions one can take with any crypto just as with any FIAT dollar that would be considered good or bad.
Islam
“Allah hath blighted usury and made almsgiving fruitful. Allah loveth not the impious and guilty. Lo! those who believe and do good works and establish worship and pay the poor-due, their reward is with their Lord and there shall no fear come upon them neither shall they grieve. O ye who believe! Observe your duty to Allah, and give up what remaineth (due to you) from usury, if ye are (in truth) believers. And if ye do not, then be warned of war (against you) from Allah and His messenger. And if ye repent, then ye have your principal (without interest). Wrong not, and ye shall not be wronged. And if the debtor is in straitened circumstances, then (let there be) postponement to (the time of) ease; and that ye remit the debt as almsgiving would be better for you if ye did but know.” (Al-Baqarah 2:276–280)
Considerations
In the case of Islam for example, there is the concept of Halal and Haram. If a thing is Halal it is permitted. This is mostly applied to diet. An example of this is if a food is okay to eat, it is Halal. If it is not good/permitted to eat it is Haram. Many different religions have a similar concept. There are certain actions in life that are permitted and some that are not. These rules are a guide to the people of the faith in order to live a life of balance and maintain society. For example, gambling is haram according to Islam and is not permitted.
There is also the concept of Riba. Simply put, the concept of riba is akin to usury or what westerners would call predatory loans. From the Muslim religious standpoint, a loan is something that should be given with the idea to help, not to make money while doing nothing. Like if you were to take a loan from a parent, family member or friend. Would they charge you interest? Probably not. You would simply pay back the same amount you were loaned. In a case like this, the loan with no interest would be Halal and permitted.
Christianity
“If you lend money to any of my people with you who is poor, you shall not be like a moneylender to him, and you shall not exact interest from him. 26 If ever you take your neighbor’s cloak in pledge, you shall return it to him before the sun goes down, 27 for that is his only covering, and it is his cloak for his body; in what else shall he sleep? And if he cries to me, I will hear, for I am compassionate.” (Exodus 22:25-27)
Considerations
Christianity has a concept of clean and unclean. Again used mostly for diet. If a food is considered clean, one can consume it. If it is considered unclean you must not consume it. There are also certain actions one can practice that can be considered clean or unclean. According to Christianity, a loan is also supposed to be an act of compassion. Given to help your neighbour. It is not supposed to be something people do to make money off of others.
We can interpret interest loans as sinful and exploitation of your fellow human which is unclean and sinful. In other words, usury. However, if a person gives someone a loan at 0% interest, it is not usury. Nor is it considered a sin.
Judaism
“If thou lend money to any of My people, even to the poor with thee, thou shalt not be to him as a creditor (nosheh), neither shall ye lay upon him interest” (Ex. 22:24). “And if thy brother be waxen poor and his means fail with thee… Take no interest of him or increase; but fear thy God; that thy brother may live with thee. Thou shalt not give him thy money upon interest, nor give him thy victuals for increase” (Lev. 25:35–37). “
Considerations
According to Judaism. Usury is prohibited. One must not give loans in the hopes of gaining interest on said loan from a brother. In the case of Judaism, it seems this has been interpreted more in the literal sense where it is permitted to give loans with interest to others if they are not of the same faith. However, this comes with stipulations. Lending is considered to be tzedakah or charity. It is supposed to be a thing that is done in good faith, however a loan to a person who is not of the same faith may be done if there is no other means of subsistence. In other words, if a person of the Jewish faith has no other means of supporting them self, this would be the only case where it would be permitted to give a loan with interest.
With these points considered. A loan with 0% interest would in all cases be permitted.
Buddhism
Buddha teaches that debt is the product of desire. We can interpret this as being the root of the problem which causes financial debt which, is suffering. If one wants to stay out of debt and not be in a state of suffering financially, one must fix the root of the problem which is material desire. There are many ways this can be achieved and the method may be different for individual people.
Considerations
In my personal life I have used many Buddhist teachings or have came to many of the same conclusions as these teachings by way of just observing life, thinking a lot and trial and error. One thing that I have personally realized is that material things are not always as they seem.
For example. No matter how much money I gain, I would never want a mansion. Who would clean it? Who would maintain it? Why would I want something so big for only me to live in? It is not logical or useful in anyway. I have learned that desire in most cases comes from places that were not thought through too well by the desirer. Everyone in crypto talks about buying lambos but no one ever talks about the maintenance costs of the lambos. Nor do they talk about the fact that a lambo is not an easy car to drive day to day. I am into tuner cars and even a lowered sports car with a hard suspension can be a pain to drive.
With that said, Buddha does not prohibit lending in any way. This includes loans with interest. However, Buddha does show us that if we are not to succumb to loans, and even loans of a predatory nature we must master our desires and practice self discipline and control.
Conclusion
Sovryn for all!
When we take a look at various religions across the world we can see a general theme. Usury or high interest loans are not good for maintaining a stable society. We must also strive to master our minds as individuals in ways that work for each of us personally to temper our desires and live a balanced life. There are also modern laws in countries across the world against usury and high interest loans.
With this said. We can make the positive case for Sovryn and its up coming Bitcoin backed stable coin, using collateralized Bitcoin at 0% interest as something that can be readily used by everyone in the entire world who chooses to use it. It is permitted by all religions and morally sound. The fact that it is minting these stable coins in a permissionless, decentralized way is even more the better. The only person you end up “owing” is yourself and this is the best part. There is no bank to treat you like another number or act like a loan shark, giving out loans with fine print and act predatory.
I said it before and I will say it again. THIS is why we are all here. This is what we all wanted. To become our own banks. To eliminate greedy middle men and entities that would use money against us as a weapon. The Sovryn team has delivered it to us. Wrapped in a truly all inclusive bow.
I invite everyone to check out the Sovryn platform and DApp:
Check out Mynt:
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Join the Sovryn Telegram:
I also invite all my readers to join the Block Advisor general Telegram chat:
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And most of all…
#StaySovryn
Tags: 0% interest loans, Bitcoin, crypto loans, lending, Mynt Protocol, religion, Sovryn, Zero ProtocolCategorised in: Adoption, Education, Fundamental Analysis, Uncategorized
This post was written by BlockAdvisor