Fundamental change needed in SOV token to secure future funding

The question people should be on peoples minds what is the utility of the SOV token?

-trading fees and Zero fees (tiny for most SOV stakers as dapp volume is getting less and less)

Most bitcoiners want to accumulate bitcoin and stack sats. If they going to use Sovryn they wont use it to speculate on tokens. And if they do decide to speculate on SOV, RIF, MYNT, MOC or FISH etc they will want profits in RBTC or XUSD. USD and Bitcoin is money which both will likely be around in a few decades. For the RSK tokens its difficult to predict.

SOV token maybe underperforming against other DeFi projects but most DeFi projects on other chains are still completely overvalued. When regulation comes to DeFi industry 99% will probably fall to zero.

I think this forum needs a reality check.

Solution: Focus on creating amazing Bitcoin Financial products like Zero. And you will bring speculators along the way.


I am of the opinion that tokens are very useful just like the BTC token is!
Each of them useful in their own way!
Sovryn needs an efficient way to scale and this past year has proved to me that the way Sovryn is set up at the moment is not the most efficient way.

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what if you burn SOV when fundraising for SUBProtocols instead of bonding the tokens?
So in order to participate in the fundraising you buy SOV , that SOV then gets Burned and in its place you mint the new SUBProtocol token.

This way you print a very palpable increase in the SOVRYN Valuation with every project that builds within the ecosystem


As explained earlier is that Bitcoin is money, store of value and its a form of payment.

SOV token is a speculative crypto token with very little utility and is not a form of payment.

To prove my point compare BTC/USD price chart against SOV/USD:

BTC/USD chart grows exponential over the last decade and has proven itself as store of value over the long term. BTC has also grown in adoption, number of wallets and number of miners etc.

SOV/USD chart is a classic pump and dump rugged DeFi token. The

Sovryn protocol is declining in adoption, trading volume is dropping off and declining number of active wallets. The only good thing it has going for it is Zero adoption and growth.

How does Zero growth incentivise me to buy SOV? Not only do i have buy a large amount of SOV but i also have to stake it too, so I can earn a share of the protocol rewards from Zero. To increase my share of the rewards I have to stake for max duration (3 years) with a 30% penalty fee if I decide to unlock early. In all honesty its just too much risk for vast majority of DeFi investors (Thats saying a lot). 3 years is a long time in the crypto space.


I agree with you on growing and focusing on Zero.

At the same time we have to also focus on the future of the platform. Sovryn is not just ZERO…it is a world built on bitcoin.

I have also expressed my opinion regarding the staking lockup and the penalty. In my opinion is a very good system to insure Governance security during times like these. I am certain that if those lockups were not in place we were struggling now to gather voting power for the sips to pass.
Yes, it is a though sale to ordinary users and that is why we have to work together to enhance the value proposition of the SOV token.

The reality check you were referring to earlier should also encompass that Sovryn is a crypto DAO that has a token and that we also have to focus on making sure that we do not put the protocol at risk by simply ignoring the fact that we have a token, all the funding that built what we have is a consequence o selling that token and by the looks of it we will have to rely on this kind of Fund Raisers for some time to come.

This chart comparison you are showing us should also serve as a reminder that token price MATTERS whether you like tokens or not. It is what everybody looks at before getting involved in any protocol and by getting involved I don’t necessarily mean buying the token, I mean using the platform.


First of all I like to commend you for this excellent post which clearly shows your credentials. Given that TG is full of complaints about let’s call it 'amateur-tokenomiks and lack of economic understanding, I think you should be added to the COT purely for your (first) contribution on this forum.

100% agreed on the Zero 1% fee proposal, and that’s why I would vote for this proposal as stand-alone if it came to a SIP. On the SOV = utility token, I am somewhat sitting on the fence, need more time to ponder on that.

Making SOV a utility token…hhhmmm…will piss off many (EXISTING) Bitcointers. however, who will be the core customers of Sovryn in 2030? OGs and Maxis, or the younf Ph.D. from India who might not care at all…? For where the global crypto market is headed at a truly disruptive-macro level, I recommend anyone to study the wisdom and genius of our new investor, Balaji Srinivasan; Network State et al.

On valuation…I studied corporate finance way back, but I am no financial expert at all. Using my common sense, I often push back on shouts on TG that claim we are undervalued. Interestingly, I do not consider the project seriously under-valued given the homeopathic revenue the platform generates for us holders of ‘ordinary shares’ as you say. I don’t know the current figures, but surely, our P/S will be higher than the P/S ratio of comparative DeXs on cryptofees. Does anyone have a comparison table?

I also think that folks need to be educated about the need to look at FDMC rather than current MC based on token emission so far. Last year, I took an interest in a Solana-based DeX (when it launched) only to find out that the FDMC was $80BN!!!

FDMC is the bedrock of VC investing, and only when you look at this metric for crypto also, will you realise that the bubble last year was indeed much bigger than the web 1.0 in 1998-2000 (I was around).


agreed. I think the biggest ego hurdle for the team is to accept that the original growth plan during the last bull market has not materialised, and that hanging on dogmatically to the 100M SOV token supply might hinder the project to rise even in the next cycle. Sovryn was never a get rich quick scheme, though my sense is that the market will, 80:20 pareto principle as always over-like 2-3 Bitcoin-based DeFi projects, and ignore the rest. Right now, I think we are not in the Top3!

and on @Bjorn point on SOV being seen as an ordinary share by smart investors…then we are a pink slip or penny stock, and who would deposit their precious BTC on such…?!

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Sovryn need’s a change a leadership.

I am no longer a SOV staker btw but I was one, a few months ago. The rewards were too low so despite paying the 30% penalty fee. I bit the bullet but at least I now have liquid capital to trade/invest somewhere else. Its a sunk cost to me as investor. The lesson i learned is dont emotionally invest in projects with big ideas and appealing visions of the future yet unable to get the basics right. Marketing execution is still very poorly. The website looks like a child designed it. Not heard any news in while about partnerships, no news about getting Sovryn more exposure in wider crypto world. Sovryn lives in its own echo-chamber. So lesson learned move on.

In the normal investment world, the stakeholders hold the CEO, CFO, and CTO to account. At Sovryn the stakeholders get NO dividends, NO business plan, NO say, NO good news and NO transparency around how the money is be used and expenses. It is very much “TRUST US, DONT VERIFY.”

Open your eyes people.

“The definition of insanity is doing the same thing over and over again expecting a different outcome.”


Why should anybody listen to you then?

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I like the idea of DeFi on bitcoin. To trade, margin trade, lend and borrow my bitcoin without any middle men or kyc so I would love to see Sovryn succeed so i follow the project closely.

The project is on its last legs. Currently, the protocol doesn’t generate any revenue with only enough runway for like 18 months from now.

I believe Sovryn would be a much better project without any shitcoin SOV token. Governance is a load of BS when only small number of devs are able to change lines of code. And the trading sucks doesnt work due to the high slippage and the early whale LPs just dump the rewards every unlock which has happened on many other DeFi protocols. The inflationary tokenomics just dilute DeFi investors and when the inflation runs out, there will likely be a SIP to increase the supply of SOV in the future to incentives LPs.

All fees on DeFi protocols will tend to zero overtime as more projects compete in the market place and with charitable devs doing passion projects building open source tools which are free to users. So Sovryn playing around with fees wont make a difference to longevity of the token or improve its token valuation.

Sovryn protocol could just be a bitcoin DeFi mobile app where you have BTC, RBTC and stablecoins integrated with Taro on the LN. The ultimate app for hyperbitcoinsation which i think would be pretty cool. Something that would get a load of adoption and a project that would build a community around. So many people around the world dont have access to banking or financial services. Sovryn could solve this. All you need is an internet connect and some bitcoin to begin your financial sovereignty journey.

Imagine Strike but without the KYC and being able to borrow, use your BTC as collateral and earn yield on your BTC. The super bitcoin privacy app.

But i guess my view doesnt matter because i cant vote anyways.

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Bonding the Sovryn token to subDAOs.

MYNT is the first, and hopefully more will come. Sovryn stakers were majorly on board with this.

ZERO went away from this, due to politics and complications of the time. No need to change this. Since tis is the crown jewel of the system, it can remain as is, diretly under the bitrocracy.

But going forward as more projects are launched on the protocol, if any need a governance structure, let it be bonded with the SOV token.


MYNT bonded token was an epic failure. And what have the MYNT team built in over 12 months except a a bonding curve app that rarely works.

What have the MYNT team done with the money they raised?
Where is the option to stake MYNT which was promised?
Where is the ultra-stable coin B-Stables?

The last roadmap said MYNT was promised to launched with Zero in Q3. #SlowFi

If we serious about SOV token valuation then we need solutions to drive revenue to the protocol. More tokens doesnt solve this.


I still like the idea of bonded tokens. Mynt has no product yet so it’s a bit too early to call the idea of bonded tokens a failure. The set-up, timeline etc. of Mynt may be a failure but this does not say much about the idea of SOV-bonded tokens. The idea is very interesting, also from a price perspective if succesful.

Problem is building and funding of possible sub-token products. Especially with a SOV price that tanked so much over such a long time that i can hardly imagine any new dev’s would take it as a form of payment (which is essentially the case with bonded tokens). It would be a different story if we could make the SOV token appreciate over time…



I think we had an important and good discussion in this forum. Now it is time to summarise and take next steps.

We do need to raise the SOV tokenprice significantly in two years time to fund our future operations.

The general consensus in this forum is that increasing platform fees only, will not do the job. So while discussing plans to raise platform fees is important, it is not sufficient.

We need to do more.

The discussion in this forum was to add two fundamental characteristics to the SOV token and receiving a better valuation because of it:-
a) Utility;
b) Some kind of token burning.

Most of the reactions are not in favor of adding Utility to the SOV token, and I think it is safe to say, most of the community members will also not be in favor to do this.

However, there is support for adding some kind of token burning.

So let’s take this one step further, what are your opinions on a SIP as described below?

To secure funding future operations, we implement the following changes:-
a) Raising the one-off (rBTC) fee for ZERO from 0,5% to 1,0%;
b) Use the increase in one-off fee to buy SOV tokens from the highly priceinelastic SOV/rBTC pool;
c) Add those SOV tokens to the Development/Adoption fund.

We need to accrue some of the value our top product ZERO creates to fund future operations and continue building Sovryn. And as illustrated below we only take a very small part of the value ZERO creates.

If a bitcoin investor needs a personal loan of 10.000 USD for 10 years, he would normally pay at least 6% interest per year. Using ZERO he now pays 0%. The value ZERO creates for this person is 600 USD per year, in total 6.000 USD. For this value creation he only pays a one-off fee of 100 USD.

The difference of paying 50 USD or 100 USD (0,5% or 1,0% one-off fees) to receive 6.000 USD value in this example, is irrelevant. The hurdle to adoption is trust in the protocol, not paying 0,5% or 1,0% in one-off fees.

Paying 1,0 % one-off to get a loan against 0%, indefinitely, is a game changer, especially when interest rates are increased worldwide. So, a small increase in one-off fees to help funding future operations, will have little to none impact on adoption, as trust in the protocol is the relevant hurdle.

Immediate effect
As we implement these changes, investors will immediately start to assess the impact of these changes on the future price of the SOV token. The valuation of the SOV token will change immediately.

Buying yearly SOV tokens from the highly priceinelastic SOV/rBTC price pool will generate upward price pressure on the SOV token. Certainly when an investor expects the ZERO protocol to be succesfull, this impact can be significant. Investors will start assessing this impact on the future SOV price, as soon as the changes are implemented.

Adding the bought SOV tokens to the Development/Adoption fund is taking them out of the circulating supply (as the tokens are only released again from this fund, if leading to higher adoption and use of the protocol). This is some kind of token burning. Looking at other blockchaintokens, investors seem to value this effect.

As discussed in this forum, Sovryn is currently being valued as on ordinary share. The changes proposed in this SIP will immediately add to the valuation of the SOV token.

Gradual effect
By actually purchasing SOV tokens from the SOV/rBTC pool there will be a constant upward pressure on the price of the SOV token. However, this will have to grow gradually over time, as usage of ZERO increases.

Next to the positive effects this SIP will likely have on the SOV tokenprice, by adding the purchased tokens to the Development/Adoption fund, this will naturally have a positive effect on funding future operations.

I do not see a negative impact of raising the one-off fees for ZERO with 0,5%, I only see positive effects of these changes.

So, personally I would vote positive for a SIP like this.

Looking forward to your reactions.


Most of the reactions are not in favor of adding Utility to the SOV token, and I think it is safe to say, most of the community members will also not be in favor to do this.

I don’t really understand, why the consesus is to not add utility to the SOV token. Isn’t it bad to have many different tokens for many different projects? You would force people to buy tokens, just to use a protocol. On the other hand if SOV gets more and more functionality, it is goint to be bought more and there will be no token bloat on the Sovryn platform.
Maybe my view is too naive and I don’t see advantages of bonded tokens. So I am open for feedback.


That’s why I would support such SIP. Whether the extra income is used to burn SOV or increase the treasury is a secondary decision for me.

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With my SIP-51 i was very hesistant to touch Zero. But like almost everyone here i agree with your argumentation and i think that Sovryn is in dire need for additional revenue generation.
20 months of runway is not a long time and solutions should be presented as soon as possible.
We have seen several community driven proposals around this topic.

I have yet to see a detailed plan and more importantly, ANALYSIS, from the exchequer that’s not just talk.


Thanks @Bjorn for moving this conversation forward.

The argument for a) seems sound. I would vote in favor of a).

Regarding b) and c) it is unclear to me if this is the best strategy, due to the fact that we’ll eventually have to dump it to fund operations and limit the fundamental value accrual.

The options regarding what to do with the income from a) would be:

  1. Redistribute everything to stakers (–> increase in SOV fundamental value)
  2. Implement a repurchasing programme like b)&c) (–> higher price but unchanged fundamental value)
  3. Balance between 1 and 2.

Regarding option 2:
Although introducing a supply shock (medium term, until we need to fund operations) would logically increase price and exacerbate price move in a bull run, I remain unconvinced that the price would relevantly and sustainably move up without a bull market. Thus b) and c) feels like betting on a new bull run before the treasury runs dry.

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As argumented in this forum: SOV token is behaving as an ordinary share and is also valued as an ordinary share. If only a) is implemented, this doesn’t change.

If also b) and c) are implemented there will be other impacts on the valuation, as shown in my last post.

Constant buying of SOV tokens from the highly priceinelastic SOV/rBTC pool, reduces supply of SOV tokens (locked up in Development/Adoption fund) and generates constant buy pressure.

This SOV/rBTC pool is very price inelastic. As shown in updated chart below.

Total marketcap of Tether, USD Coin and Binance USD is at the moment 133 billion, in a bear market. If an investor expects ZERO to generate 0,35 billion in loans a total amount of 1,75 mio USD (appr. 105 BTC) is used to buy SOV tokens, if b) and c) are implemented.

Without any additional inflow of SOV tokens in the pool the price would move from 0,23 USD to 2,46 USD and a total of 2,3 mio SOV tokens would have been taken off the market. In practice there will be inflow of SOV tokens in the pool, so the price increase will be less, however the amount of SOV tokens taken off the market will be higher, impacting valuation.

My concern with only implementing a) is it will not be sufficient to significantly increase the price of the SOV token as current fees are still so low.


Disagree a 1% fee is a huge turn away as a Zero user myself. I will just go to FUJI money on Liquid sidechain (basically another bitcoin backed loan protocol) who charge a one time fee of 0.75% which has no token.