The most popular and largest smart-contract Bitcoin (BTC) sidechain RSK has recently introduced meta-transactions. The main goal is to increase Bitcoin DeFi adoption by using the RIF Enveloping solution.
RIF Enveloping would allow third-parties to subsidize transaction fees for users. This would reduce entry barriers to users that want to start using DeFi solutions but don’t do so due to the complex fee structure currently implemented.
Wallet developers and other platforms could start paying for networks fees and help users get access to the Decentralized Finance (DeFi) market. Nowadays, users can borrow funds, lend their money and swap currencies through DeFi solutions.
Understanding RIF Enveloping and Bitcoin DeFi
When we use DeFi solutions that run on top of other blockchain networks, including Ethereum (ETH), we need to pay for transaction fees. This can be somehow complicated to understand for a person that comes from traditional finance.
Indeed, when users try using DeFi solutions they have to purchase the native asset in order to start processing transactions. This is really not intuitive and can be harmful to onboarding new users and investors to the DeFi space.
For example, if we want to use DeFi solutions on top of Ethereum, we should buy ETH to pay for transaction fees. The same would happen on the RSK network where we should have RBTC.
With RIF Enveloping this becomes a thing of the past. By implementing this solution using Smart Wallets – such as Beexo Technologies – investors can start engaging with DeFi solutions without having to buy the underlying assets.
According to the official announcement made by IOVlabs, RIF Enveloping reduces the cost for sponsored payment by as much as 50%. dApp creators and DeFi platforms can now subsidize network fees for users and reduce the entry barriers to the DeFi industry.
RSK Co-founder and IOVlabs Chief Scientist, Sergio Lerner, commented about this implementation:
“RIF Enveloping is the first of a series of technological enhancements that highly improves the usability of RSK. Together with the upcoming fast peg-in system and zk-rollups, developers can build wallets that provide users a much better user experience that is fundamental for financial inclusion.”
Although Beexo is the first wallet to be offering this solution to users, in the future, new companies and firms could start implementing RIF Enveloping. The decentralized finance market continues to expand and RIF shows it is at the forefront of the innovation process in this space.
In recent months, we have seen how Sovryn allowed users to enjoy DeFi solutions on top of the RSK network. In this way, users can enjoy a wide range of trading and lending solutions that would allow them to get access to some of the most advanced DeFi products in the industry.
