DePix: a discreet way to enter the digital world

O DePix is a stablecoin backed by Brazilian real that acts as an intermediary layer to make buying bitcoin more efficient. decentralized, private and secure.

Decentralized Pix (DePix) is a digital asset that tries to solve what its creator, Eduardo Jatahy, calls Bitcoin's main vulnerability: its connection with the fiduciary system. In other words, the bridge between the physical world and the digital world.

Following the introduction of Pix by the Central Bank in 2020, this agile payment method has established itself as the most common way to buy bitcoin, mainly by depositing with brokers (exchanges of cryptocurrencies).

But the popularization of the Pix brings a concern: financial surveillance as a risk to individual privacy and sovereignty.

The advantages of the digital world

Once you have bitcoin in your wallet, a whole range of possibilities opens up due to the technological innovations of cryptocurrencies. One of them is decentralized trading (without a banking intermediary) through atomic-swap, a type of smart contract (smart contract) which solves the problem of trust in common exchanges.

In a atomic-swap, The traders exchange at exactly the same time, without the need to trust the other party. One example is SideSwap, a platform that offers precisely this technology: smart trading without giving up custody.

Before DePix, SideSwap's main currencies were the digital dollar Tether (USDT) and Liquid Bitcoin (L-BTC), a currency pegged to the value of Bitcoin. Liquid.

And what is Liquid?

Liquid is the best known and most widely used sidechain of Bitcoin, a network parallel to blockchain which enables fast, cheap and private transfers. Crypto assets can enter and leave Liquid via swaps, offered by various service providers, including SideSwap itself.

Through DePix, the Brazilian real becomes part of this ecosystem, making it possible to exchange the real stablecoin for dollars, bitcoins or other assets with agility, privacy and security in a decentralized manner.

Using DePix, you enjoy a layer of privacy and security, something that PIX cannot offer.

Furthermore, similar to Bitcoin, DePix has eight decimal places, making the stablecoin even more divisible than the real thing.

How can an entrepreneur benefit from DePix?

First and foremost, DePix creates a safe and discreet way to buy bitcoin or other digital assets, without the need for trusted intermediaries.

But it can also improve your financial management in a smart way, facilitating compliance with tax obligations.

Another interesting use case is for foreign entrepreneurs, who can connect their businesses to Pix even if they don't have a bank account in Brazil. One banking node could offer an API to generate a QR code for receiving Pix, and the shopkeeper could receive it at the other end in DePix for eventual exchange into local currency or Bitcoin.

The risks

Although there are more complex and decentralized plans for the future, at the time of writing this article DePix's backing was limited to the corresponding balance in a bank account.

It works, but the account balance is subject to operational and legal risks, which could affect the stablecoin's parity with the real.

If the broadcaster receives a chargeback request via the Special Return Mechanism (MED) or account blocking by court decision, there may be a temporary suspension of the exchange of DePix for real. This risk is mitigated by the Depix model itself, which only accepts known partner institutions and places transaction limits per CPF.

It's worth noting that these risks also exist, even more worryingly, in traditional solutions for buying cryptocurrencies, such as centralized exchanges. Technically, because you keep custody of the DePix, you will be free to exchange it for Bitcoin or USDT, although in an exceptional situation of loss of parity with the Brazilian currency you will incur some losses in this operation.

Is it worth using Depix?

Yes, Depix is a safe and simple way to increase the privacy of your PIX. It's almost like going back to paper money, but with the conveniences of the digital world.

If you're an entrepreneur, freelancer or just someone interested in implementing Depix in your area of activity, get in touch with Soberano. We have a specialized team that can help you. Get in touch: