Bitcoin layer one has only 1MB blocks which means it can only process several transactions on layer one and as such the invention of the second layer solutions was invented. The first second layer solution is Lightning Network which enables small payments and fast transactions with a very small fee.
But now we have even more solutions one of that solutions is Rootstock which in short is an EVM-compatible sidechain that works on top of Bitcoin, not to compete against Bitcoin but to complement it and bring more utility to it.
Not only Rootstock uses Bitcoin as the native asset to pay for transactions but also it has merged mining so that Bitcoin miners can have a second source of revenue. Those fees that users pay are used to pay for transaction fees to reality decentralized transactions utilizing smart contracts and in my opinion, the real DeFi will be the one that will run on top of Bitcoin and will use Bitcoin as its native token.
Rootstock will indeed enable the creation of many tokens, but it will be up to the reader to do their research to make sure investors and regular users seeking to invest their satoshis invest their money in tokens and projects that have actual real utility.
Rootstock will enable meme coins to exist but it will be users who decide if those memes are worth their satoshis.
Sovryn is a decentralized exchange (DEX) that is running on Rootstock and it is a utility token because it allows you to vote if you stake your tokens and receive revenue from the DEX. The revenue stakers receive is not just printed tokens it is actual utility because it is the fees the DEX collects every time users decide to do a trade using the features the DEX offers.
You can now have a zero percent interest loan utilizing ZeroProtocol and only pay a commission of 0.5% which will only be charged once for a loan, once the loan is open you don’t have to pay any other fees no matter how long your loan stays open. The risk of Zero Interest Loans is that your loan could get liquidated if your collateral reaches 110% of the total of your loan.
Taro is the next development that Bitcoin is having, and those that are producing that tool are saying you will be able to use stablecoins, I must remind you that those stablecoins are highly centralized, while the dollars you get from Zero is a dollar that is emitted by the smart contract and is based on the price of Bitcoin at the moment of opening the loan. And that dollar I will call ZeroDollar, will be backed by Bitcoin.
ZeroDollar is a stablecoin worth the Bitcoin network and I think that once Taro is open that dollar will be superior to any stablecoin emitted by any centralized entity. Not to mention ZeroDollar is not the only decentralized stablecoin, we also have DollarOnChain or DoC which is another stablecoin that is decentralized and backed by Bitcoin.
So Taro will have better stablecoins DoC and ZeroDollar those stablecoins will be created on Rootstock using a smart contract, and Lightning Network will be another network on top of Bitcoin all will be bridged using decentralized bridges too.
Bitcoin Layer One.
Bitcoin Lightning Network.
Rootstock Bitcoin’s sidechain.
Bridges unifying all the previous.