RSK does not stand for risk, in fact it is the exact opposite, as one of the most secure blockchains in the crypto sphere. It is an open-source protocol that hosts smart contracts for the Bitcoin Network just like those that were created for Ethereum. Smart contracts are extremely useful, and considered to be one of the most visionary and disruptive products associated to the blockchain. Smart contracts are able to transact between two parties with no one in the middle of the equation. They negate the use for banks, brokers and even mortgage lenders.
RSK effectively runs parallel to the Bitcoin network as a side chain, where it supports communications between both chains in a way that bridges Bitcoin and RSK. This brings the best of both worlds for RSK users who can execute transactions off of the Bitcoin network, while capitalizing on the value proposition of the RSK chain.
Bitcoin Benefits From RSK
For Bitcoin, a product like RSK is of paramount importance, as where bitcoin falls down in terms of its shortcomings, eg. its slow speed to execute transactions, RSK picks up the pace. It takes the focus off of Bitcoin as a tradable asset and opens it up to a new use case as a real currency solution, which has been one of Bitcoins challenges due to its extreme volatility.
RSK, which is currently capable of processing 400 transactions per second, and in the future up to 2000 TPS when it incorporates Lumino, can confirm a new block in 10 seconds against Bitcoins 10 minutes per block.
Bitcoin holders can use their assets for more than speculatory purposes, with the ability to transact, hold, lend and even earn passive revenue from their Bitcoins, while leveraging the security of the Bitcoin network for use by the RSK platform. The RSK ecosystem hosts a variety of decentralized and financial applications including wallets, NFT marketplaces, payments, oracles, lending apps, trading platforms, stablecoins which are tethered to stable currencies like the USD, analytics, margin trading and asset swaps to name a few.
RSK Usability
RSK currently has $83,483,476 worth of Bitcoin locked, on projects such as Sovryn, a self-governing Bitcoin-based decentralized trading and lending platform, developed on RSK.
rBTC is the native token of the RSK Live Mainnet and it is pegged against the BTC in a ratio of 1:1. It is used as gas to pay for Smart Contract execution, just as ETH is used as gas for the Ethereum network.
Users can get hold of rBTC through Liquality, Sovryn, Powpeg and Kucoin. Users can earn cash by yielding their RBTC to Sovryn and rLending with an average of 6% return.
How About DAI Tokens?
DAI, a very popular stablecoin, with over 76 million in circulation, is pegged against the price of the dollar, meaning it always keeps its value as close to $1 as possible.
DAI rather than working through Bitcoin, works via Ethereum-based smart contracts. Ethereum in practice is genius, however it comes with many limitations including extraordinarily high gas fees and very slow execution speeds which make it impractical for some use cases.
RSK however hosts the rDAI, which is always pegged to the DAI, and therefore always pegged to the USD. Yet, when transacting in rDAI, rather than DAI, users pay much cheaper transaction costs, around 0.15c per transaction which is approximately 80 times cheaper than transacting DAI itself over the Ethereum network. rDAI like rBTC is redeemable at any time.
RSK onboarding both BTC and DAI to the smart contract game brings value to both BTC and DAI, and allows Bitcoin holders to seek extra value from the blockchain as they access opportunities from DeFi, while retaining the heightened security of both the Bitcoin and Ethereum networks.
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2021-05-14 18:55:08
