The RSK Solution. Part 1

What is RSK?

RSK is a secure smart-contract platform that enables decentralized applications secured by the Bitcoin Network to empower people and improve the quality of life of millions. The platform incorporates a Turing Complete Virtual Machine to Bitcoin. RSK believes that new use cases are necessary in order for Bitcoin to become the leading global cryptocurrency, and that adding smart-contract capabilities is key to secure that future. It also provides other enhancements to the network such as faster transactions and better scalability, features that will inevitably increase adoption.

INTRODUCING MONEY ON CHAIN

Money on Chain is a protocol built on RSK that provides a 100% Bitcoin-Collateralized Stablecoin. This solves the biggest problem for Bitcoin mainstream adoption: [the volatility problem]. A Bitcoin-collateralized stablecoin would minimize the counterparty risks found in other stablecoins, such as traditional bank accounts or less established blockchains. The collateral is not held in a third-party bank account, but, instead, in a smart contract secured by the most liquid and widely used blockchain in the world( The Bitcoin Blockchain). An open-source smart contract on the RSK network provides part of the solution, but the main benefits are derived from building on top of Bitcoin.

The Money on Chain protocol provides the following tokens:

• The Dollar on Chain (DoC), that is the first Bitcoin Collateralized Stablecoin; The Dollar on Chain (DOC), is a RRC20 token pegged to us Dollar for risk-averse individuals. Those who need a stable currency use the DOC, a token that maintains a peg with the US dollar

• The Bitpro (BPro), a token designed for Bitcoin Holders; a RRC20 token for Bitcoin holders seeking a passive income in RBTC. Bitcoin holders, people who save their bitcoins for the long term and seek an income on their bitcoins, use BitPro, which is a token that pays a bitcoin interest rate in addition to being slightly leveraged, which increases the holding of RBTC when the price goes up

• The BTCX, a leveraged Bitcoin long position. Traders looking for leverage during the RBTC price rise can use the BTCX which are positions leveraged in the RBTC price, these positions work as a future that expires every 90 days The protocol also offers the

• Money On Chain Token (MoC), a governance token. Money on Chain platform also includes a decentralized token exchange (TEX) for the trading of tokens on the RSK blockchain.

THE BITCOIN PROBLEM

Cryptocurrencies are attractive because they help us overcome inefficiencies of traditional fiat currencies. The technological backbone of Bitcoin and other cryptocurrencies is the blockchain, which uses a distributed ledger to record the information of all holdings and transactions in their domain. Any currency, be it fiat or cryptocurrency, needs to fulfill the three functions of money to be accepted in society: it needs to function as (i) a medium of exchange: (ii) a unit of account, (iii) a store of value. All these characteristics, however, are compromised when a currency is too volatile, as Bitcoin is. As a solution for the problems caused by volatility, several stablecoins were created for the cryptocurrencies market. Most of these have solved the volatility issue but have also created new problems. Money On Chain proposes a solution that solves the volatility problem without the downsides caused by other stable coins.

THE MONEY ON CHAIN SOLUTION

Money On Chain strips Bitcoin’s volatility into two separate tokens:

1. The Dollar on Chain (DoC) — first Stablecoin backed by bitcoin. The token price is pegged to the USD Dollar, and the peg is guaranteed (1DOC:1USD) by the SmartContract.

2. The Bitpro (BPro) — a token suitable for Bitcoin holders. This token receives:

• Free leverage provided by the DoC tokens holders.

• Passive income paid by traders doing BTC leveraged operations on the platform.

• Fees paid by users of the platform.

• MoC tokens rewards on their BPro staked on the platform.

The DoC tokens perform the three functions of money mentioned above, being: a medium of exchange, a unit of account, and a store of value. The BPro tokens gets the volatility of Bitcoin not wanted by DoC Holders. Thus, BitPRO is even more volatile than Bitcoin. BitPRO holders sell part of that volatility to traders looking for leverage (BTCX), earning a passive income.

Also worth noting is the value of The BTCX and the Money on Chain (MOC) tokens. The BTCX is a BTC/USD instrument that is settled in Bitcoin. It is a X leveraged long operation on the price of BTC (current leverage is set to 2 each 30 days).

The Money On Chain Token (MoC). MoCs provides use cases like: • Governance: Users staking MoC will have the power to vote and veto the platform updates

• Fees Revenue Stream: The MoC’s holders will be able to stake MoCs to earn platform fees and staking rewards.

EXPLORING THE BitPRO TOKEN AND HOW TO EARN INCOME FOR BITCOIN HOLDERS IN NIGERIA

For many Bitcoin users, whom Bitcoiners call Hodlers, the increase in the value of Bitcoin in the long term is very attractive. When the MoneyOnChain protocol was designed, special consideration was given to Hodlers, and different incentive alternatives were evaluated to increase contributed collateral to the protocol. This is how the BPRO was born. The BPRO was designed so that Bitcoin Holders receive income in Bitcoins. One way to obtain it is through free leverage, which is given by the holders of DOC Tokens. As a result of this leverage, when the price of BTC increases, the BPRO token will increase a bit more.

A visit to the Money on chain website shows the leverage on the BPRO. If for example it shows that the leverage of the BPRO at that time was 1.2003. That means that if the price of bitcoin at that time will increase by $ 100, the price of the BPRO would increase 120.03. This leverage can also negatively impact the BPRO holder, because a drop of $ 100 at that time would cause the BPRO price to drop 120.03. The expected leverage cannot be determined theoretically, because it depends on multiple factors, such as the demand for DOC, BTCX, BPRO, and the rise and fall of the price of Bitcoin. Leverage impacts the price of the BPRO. Although, as we have mentioned before, in the face of a drop in the price of Bitcoin, leverage can play unfavorably for BPRO holders, simulations carried out based on historical prices have shown that this free leverage is likely to generate an appreciation in the price of BPRO above the price of Bitcoin. On the other hand, an analysis of the historical evolution of the price of the BPRO vs the price of Bitcoin also shows a positive trend as the price of Bitcoin appreciates over time. So far these simulations based on historical BTC prices, and on the other hand the actual behavior of BPRO vs BTC since the launch of the platform, show that for a BTC hodler who believes that the price of BTC is going to rise, BitPRO is a good token to evaluate, because in the long term it will increase in price even more and provide profit for the Hodler.

INCENTIVES FOR USING BITPRO TOKEN

a. Free leverage

In financial terms, leverage means using mechanisms as a boost to increase investment possibilities. In the case of the Money On Chain system, this leverage is provided by the DOC users, who derive the volatility to the BPRO.

b. Coded income

Another incentive offered by the BPRO is coded income. As explained in the video, BPROs take volatility from DOCs and sell it to traders (BTCx). By doing this, BPRO users earn an interest. The interest rate is guaranteed by the Smart Contract and is variable, that is, it will depend on market conditions (supply and demand).

c. Rewards in MOC tokens

Those who have BPROs on the Money On Chain platform will also get rewards in MOC tokens. These tokens will have several use cases, among them their users will be able to vote and veto updates to the platform; and they will also be benefited with a discount in the rates for the use of the platform..

HOW TO GET THE BITPRO TOKEN?

The first step to get BPRO is to exchange your bitcoins for RSK Smart Bitcoin (RBTC). You can do this at an exchange that supports bitcoins and RBTC. Once you have your RBTC, you must take them to a wallet, such as Defiant, Liquality, rWallet etc Then, you visit the Money On Chain platform and there you can obtain your BPROs.

SETTING UP YOUR MOBILE WALLET

Let’s take a step by step tutorial on how to configure a mobile wallet to access Money On Chain protocol.

Let’s use Defiant wallet (My preferred wallet) as an example. Defiant wallet is integrated into Money On Chain Protocol which allows you to operate directly from the wallet app but also lets you connect to Money On Chain web app through Wallet Connect.

Step 1: Installation

Go to the Defiant web page and select Apple or Google store depending on your smartphone to download it. Install the app like every other app on your smartphone and open it.

Step 2 : Configuration

Defiant is a self-custodial wallet so whenever you create a new wallet, it will show you a seed phrase that you will have to write down on paper as a backup in case something happens. After you go through this step and verify the words copied, Defiant asks you to select the blockchains and tokens you will use in your wallet. Go through every blockchain you want and select the tokens you will use. (Don’t forget to Add RBTC). Then click Accept and after a few seconds, the wallet is created and ready to use. Remember you need rBTC to use as gas to use this wallet.

You are all set up !

HOW TO GET BITPRO TOKEN

There are 2 ways to get tokens, They are either buying or minting .

Note: Tokens can also be received from a third party. As soon as you finished setting up your wallet you can receive BitPRO tokens from any user. The only thing you need to do is to share your public key with the other party. (Remember that you should never share your private key or your seed words.)

1. Minting tokens Minting tokens is like creating the tokens by yourself. In this process you lock rBTC to be able to issue the equivalent in Money On Chain's tokens.

2. Buying on a secondary market You can also get tokens in a secondary market (like the TEX) or a swap app (like Sovrynswap).

HOW TO MINT BITPRO

Step 1 Connect to Money on Chain Go to https://alpha.moneyonchain.com and connect with the wallet of your preference. The wallet will prompt you a message to sign, in order to login to the platform with it. Please sign it, to access the home page of the dApp. Once on the Home page, you can either click the arrow button at the right of BPro card or click BPro Token in the left menu. On the BPro section, you have all the information needed to perform the desired transaction.

step 2 : Click rBTC on the left box to MINT BPro (if you want to REDEEM select BPro in the left box). Enter the amount of rBTC and the system will fill the amount of BPro to be minted. You can see below the equivalent of the transaction in dollars and the fee. Click Mint button.. Another confirmation screen is shown just to be sure, click Confirm, and then the wallet confirmation. The app will show that your transaction is pending and you can verify it by clicking on Explorer Transaction . After a few seconds, your balance will be reflected.

Congratulations! You have just minted your First BitPRO

For more Information on RSK and Money on Chain Protocols, please visit https://developers.rsk.co/solutions/moneyonchain and https://moneyonchain.com/ respectively.