SovaBTC
Overview
SovaBTC is the canonical onchain representation of Bitcoin within the Sova Network. Each SovaBTC is backed 1:1 with native BTC held in distributed, multi-signature custody. It provides the standardized accounting unit across the system — powering deposits, vault allocations, redemptions, and cross-chain integrations.
SovaBTC is designed to make Bitcoin productive without compromising its reserve status. By minting SovaBTC, users unlock their BTC for use in onchain strategies, DeFi applications, and treasury operations — all while maintaining the ability to redeem back to native BTC at any time.
Key Properties
1:1 Backed: Every SovaBTC is fully backed by native Bitcoin, auditable in real time.
Non-custodial minting: Users deposit BTC into Sova’s canonical custody address on Bitcoin L1; validators verify the deposit and mint SovaBTC to the user’s address.
Cross-chain deployable: Through Hyperlane and other bridges, SovaBTC can move seamlessly across chains (Ethereum, Base, Arbitrum, Berachain, and more) while retaining its 1:1 peg.
Non-yielding base asset: SovaBTC itself does not earn yield. It is a clean, fungible representation of BTC — the foundation for yield vaults, settlement, and DeFi integrations.
Role in the Ecosystem
SovaBTC acts as the base layer of the Sova treasury system:
Deposit & Mint: Users send BTC (or wrapped BTC equivalents like WBTC/cbBTC) and mint SovaBTC 1:1.
Treasury Standard: SovaBTC standardizes accounting across the network, ensuring consistent settlement, reporting, and integrations.
Yield Gateway: While SovaBTC itself is static, depositing it into Sova Prime converts it into spBTC, a yield-bearing asset that accrues BTC-denominated returns.
Redemption: At any point, SovaBTC can be burned to withdraw native BTC from custody.
Why SovaBTC Matters
Transparency: Backing reserves are verifiable onchain, removing opacity common in wrapped BTC models.
Interoperability: As the canonical Bitcoin unit across Sova and partner chains, SovaBTC simplifies DeFi integrations and collateral usage.
Safety: BTC reserves are secured through a multi-party custody architecture with time-delayed withdrawals and slashing penalties for validators, reducing counterparty risk.
Flexibility: Users can choose to hold SovaBTC as a liquid onchain representation of BTC or allocate it into vaults for yield.
Example Use Cases
Treasuries: Corporate or DAO treasuries can mint SovaBTC to access onchain yield strategies while retaining Bitcoin exposure.
DeFi Collateral: Lending protocols can accept SovaBTC as standardized, auditable BTC collateral.
Settlement Asset: Traders and market makers can use SovaBTC for clearing and settlement across Sova Network and other EVM chains.
Yield Entry Point: Users deposit SovaBTC into Sova Prime to generate BTC-denominated income through institutional-grade strategies.
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