The Hitchhiker’s Guide to the DeFi Galaxy

There are dozens of stablecoins out there. On one end there are those with off-chain collateral (fiat, gold, silver), and on the other end those backed by on-chain crypto-assets. In between, there is a plethora of experimentation and mixed models, which for the average Joe might be very confusing, especially with different stablecoins used on different blockchains… If only it could get easier…


Today there are five stablecoins with at least $1 Billion in crypto-USD float. There are many more with less than that… They are different brands with different unique selling points and so they are not exchangeable 1 to 1. As stablecoins bloom and DeFi markets grow beyond Ethereum to chains like Rootstock, Avalanche, Binance, Solana, etc. the combined USD liquidity gets diluted which is suboptimal for the industry as a whole.

That is where BabelFish Protocol comes into play — with its mind-boggling simple objective to enhance USD-stablecoin flow and accelerate hyperBitcoinization in a product that is simple to use and understand. It turns these liquidity swamps into a liquidity lake or ocean even. It simplifies stablecoin management for DeFi protocols, exchanges and users.

BabelFish’s name is inspired by Douglas Adam’s The Hitchhiker’s Guide to the Galaxy, a wholly remarkable best-selling book. “The Babel fish is small, yellow, leech-like, and probably the oddest thing in the Universe… if you stick a Babel fish in your ear you can instantly understand anything said to you in any form of language.” Long story short — BabelFish Protocol will “translate” different stablecoins to one common and fully understandable stablecoin.

Babelfish aims to be one of a kind decentralised aggregator and distributor of stablecoins, a “decentralised bank” for stablecoins where the stablecoins from different chains could be transferred into the protocol, and exchanged 1 to 1 across protocols. When using xUSD (BabelFish native Stablecoin), users would be insured against idiosyncratic risks in the ecosystem by a growing pool of rBTC. The solution provided by BabelFish is very beneficial for the whole decentralised finance sector as it will give much needed flexibility in leveraging the combined stablecoin markets across different chains. Apart from that users participating in the system will be rewarded with FISH tokens to govern the protocol’s accepted stablecoins, allocations and use of funds. What is important — BabelFish is a non-custodial contract. There is no owner of it — except of the community.

BabelFish would have branches across the DeFi multi-chain universe and will seek for the best yield to optimise its stablecoin collateral. The idea is to deploy such collateral in battle-tested lending markets like AAVE, Compound, Venus, et al. The yield earned would periodically be used to acquire rBTC for the protocol’s insurance. However, once governance is enabled, it is likely that a percentage of this yield will be used for FISH buybacks and be distributed to governance stakers, rewarding those most vested in the governance of the protocol for the long-term.

Long time ago in another Galaxy far away…

The project’s seed was planted with CementDAO, a stablecoin clearinghouse some of BableFish Team helped research and develop in 2018 to create concrete solutions to the inevitable risks and inefficiencies we see today on the maturing stablecoin ecosystem. About 28 USD stablecoin issuers existed back then with a combined market cap shy of $3bn. Already back then was clear then that a shared standard between stablecoin issuers would significantly optimize our shared goal: enabling mass adoption. All stablecoin stakeholders from across the world who participated in the meeting at the iconic Reform Club in London validated the need for a translation device that could enable stablecoin holders from any (accepted) issuer to trade with each other at 1:1 value, reducing risk and increasing utility.

The Sovryn Infinite Improbability Drive…

BabelFish will be the first project built on Sovryn with the mission of bringing deep stablecoin liquidity to the SOVRYN universe (more about it on SOVRYN.APP). Later it will expand across the Blockchain Galaxy… Launch date and details are to be announced, so stay tuned.

To be continued…




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