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Sova Protocol

🤗 What is sova protocol

Sova Protocol is the first Bitcoin-native protocol that issues stablecoins using BRC-20 tokens and RUNE through a Collateralized Debt Position (CDP) model. It combines the strengths of Bitcoin’s robust security and the flexibility of decentralized finance (DeFi) to create a more decentralized stablecoin system.

Here’s how it works:

  • BRC-20 Tokens: These are tokens built on the Bitcoin network, enabling Sova Protocol to issue stablecoins natively on Bitcoin without needing to rely on external chains.

  • RUNE: A key asset from the BTC ecosystem, RUNE is used as part of the collateral pool, providing liquidity and cross-chain capabilities.

  • CDP (Collateralized Debt Position): Users can lock up Bitcoin or Bitcoin-native assets like BRC-20 tokens as collateral to mint stablecoins. The stablecoin is pegged to a fiat currency, offering users a decentralized and Bitcoin-backed alternative to traditional stablecoins.

By integrating BRC-20 tokens and RUNE, Sova Protocol leverages Bitcoin’s security, aiming to create a more trustless, decentralized, and scalable stablecoin ecosystem on the Bitcoin blockchain.