A Guide to Tokens in the Rootstock Ecosystem
Rootstock is the first and biggest Layer 2 blockchain on Bitcoin — supercharging the network by delivering DeFi and smart contracts to a wider audience.
And within the ecosystem, there are several tokens that make all of this possible such as RBTC, RIF, USDRIF, DOC, SOV, and more. Each has been specifically designed to allow BTC owners the flexibility to access the DeFi ecosystem on Rootstock.
Here, we’ll explain some of the key digital assets within the Rootstock ecosystem.
RBTC
RBTC is Rootstock’s native token — also known as “Smart Bitcoin.” It’s used to facilitate transactions and pay gas fees and opens the door to dApps built on the network.
A 2-way peg protocol ensures that one RBTC is always worth one BTC — This is done through a secure protocol known as the powpeg.
This system secures the locked bitcoins with the same Bitcoin hashrate that establishes consensus on the Bitcoin network. This method of securing the peg uses the robust security mechanism of Bitcoin’s proof of work, thereby ensuring that for every BTC locked, an equivalent RBTC is issued, maintaining a strict 1:1 ratio. This process is irreversible, ensuring that the peg remains consistent and reliable.
Given this manual process can be complicated for beginners, apps that guide users through transactions have also been created as an alternative.
RBTC is supported by many major wallets — MetaMask, Exodus, Ledger, and Trezor among them.
Explore the comprehensive list of ways to get RBTC here.
RIF
The RIF ecosystem, which enables the next generation of fintech products to be built on Bitcoin, has a native token too.
This digital asset is also called RIF — and aims to support crucial use cases concerning financial inclusion.
The RIF token powers the RIF ecosystem which was designed to pull the world towards global financial inclusion. It provides the infrastructure and building blocks for a new financial system that works for everyone.
Users can consume the RIF token in all RIF protocols such as RIF Wallet, RNS, RIF DeFi Gateway, and more. They can also use RIF tokens to pay for gas fees via RIF Relay, without the need to hold Rootstock’s native token RBTC.
USDRIF (RIF dollar)
USDRIF is a stablecoin that is 1:1 pegged to USD, meaning each token is worth $1.
This is a fully decentralized digital asset that is backed by an over-collateralization of RIF. This means that the RIF held in reserve exceeds the number of USDRIF in circulation.
USDRIF is designed to offer an alternative to centralized stablecoin issuers who may lack transparency about the assets they hold in reserve, and how risky they are.
It also serves as a replacement for RIF Dollar on Chain (RDOC) — and anyone with RDOC tokens can exchange them for USDRIF on a 1:1 basis using the Swap feature found within the RIF On Chain dApp.
As well as making borderless payments more affordable and accessible — delivering a cheaper alternative to existing remittance services — USDRIF attends to address currency volatility, broaden access to dollars, and unlock a new range of lending products. There can also be advantages for merchants, who save money on processing fees paid to credit card giants.
A diverse ecosystem
Each of these tokens has a role to play in powering the plethora of fintech applications that have been built on top of the Rootstock blockchain.
Low fees prevent transactions from becoming prohibitively expensive for everyday users, all while providing developers with a scalable and practical environment for creating new dApps.
Recommended reading
To learn more about the Rootstock ecosystem, dive into:
Legal Disclaimer
This article is for general information purposes only. It does not constitute legal, financial, or other professional advice, and should not be relied upon as such. RootstockLabs accepts no responsibility for any loss or damage that may arise from reliance on information contained in this publication. Readers should seek independent professional advice before making any investment or financial decisions based on the information contained in this publication.
This publication is intended to provide an indication of stablecoins and potential scenarios in the finance industry and does not guarantee any particular outcome. Any reference to specific products, services, companies, or organizations does not imply endorsement or recommendation by RootstockLabs. Readers are advised to conduct their own research and due diligence before acting on any information contained in this publication.