GateLive AMA Recap-AlexLab

BRC-20, the standard token on the Bitcoin (BTC) blockchain, crossed $6 Billion in market cap within a few months of its launch. What is BRC-20 exactly? What are the most popular tokens?

Dr. Chiente Hsu(CEO and CoFounder of Alex):
The key takeaway is that with BRC20, Bitcoin now has a fungible token standard that lets anyone deploy a unique ticker which will start a free mint.

1)gregory maxwell, andrew poelstra and pieter wuille back in 2018 proposed an upgrade of Bitcoin protocol called “taproot” which basically improved two things. One is MultiSig and the other one is to relaxes the and input limits on Bitcoin transactions, i.e. optimize block space usage,. And it was activated in November 2021.

2)Casey Rodarmor leverages the relaxed limits and relaxed constraints on input sizes to build a simple protocol that embeds chunks of arbitrary data into Bitcoin.When Casey Rodarmor launched the Ordinals protocol in January 2023, he found a way to index every Satoshi and track it throughout the Bitcoin network. A Satoshi or sat, is the smallest unit of Bitcoin. The Ordinals Protocol allows you to inscribe any type of file on-chain on Bitcoin. That inion points to a sat which tracks its ownership so what you end up with is a fully on-chain Bitcoin NFT.

3)domodata invents the brc-20 standard, a json format for minting tokens via ordinal inions
On March 8th, 2023 Domodata tweeted a thread theorizing a way to create a fungible token standard on top of the Ordinals protocol called BRC-20.

It states that anybody can inscribe Java Object Notation or JSON files onto Bitcoin via the Ordinals Protocol to “Deploy” a BRC-20, to use $ORDI token as an example it was deployed with the name “Ordi” a max of 21 million and a limit of 1000.

Then anybody can mint it for free. All BRC-20 tokens are free mints with no pre-mine. Once $ORDI was deployed anybody can inscribe a mint JSON which works until 21,000,000 tokens are minted.

Once the token mints out you can begin transferring your tokens by inscribing a transfer JSON of however many tokens you want to send.

Over 14,000 BRC-20 tokens have been issued, with ORDI, PIZA, MEME, and MOON being the most popular.

The last thing to understand about both ordinals and BRC-20 is that the indexers assign every inion or BRC-20 token a unique number based on the order of its creation. So the first BRC-20 token is 1, the second one is 2, etc. The market seems to value this order a lot.

With NFTs and all these BRC20 memecoins it certainly seems like Web3 has arrived on Bitcoin. If this is indeed the case then we have a lot of catch up to do.

Recent activities contributed to the recent rise of transaction fees for miners along with the market cap. What impact will this have on miners?

Dr. Chiente Hsu(CEO and CoFounder of Alex):
Since the launch of the Ordinals Protocol there have been over 5 million inions with over $27M in Ordinals fees paid to miners. Ordinals has solved Bitcoin‘s fee problem.)

To put that into context the current average Bitcoin transaction fee is about $31 whereas back in January it was around $1.

The surge in transactions has been over 99% BRC-20 text inions for mints and trades. The trading activity surrounding these tokens has contributed to daily transactions on the Bitcoin network, going to a record high of 534,000, as per The Block data.

And this is a very important step for the future of Bitcoin as a blockchain: By driving up transaction fees, Ordinals incentivizes miners to continue securing the network and attracts developers to the eco, bringing more users, more adoption, more growth.

These tokens’ve congested the Bitcoin network and pushed it to its operational limits.What impact will this have on the Bitcoin ecosys-tem?

Dr. Chiente Hsu(CEO and CoFounder of Alex):
Network congestion is the driver of higher transaction costs. Congestion is a net positive, it means Bitcoin is in demand by users, it means miners are incentivized to continue securing the network, it means Bitcoin will attract more developers, which drives new innovations and new cases more attention and broader adoption.

To put it in perspective even though there are over 400k pending transactions in the Bitcoin mempool, Ethereum is still more expensive to use. Ethereum gas fees are why there has been so much developer activity around L2s like Polygon and Arbitrum and inevitably Bitcoin congestion leads to L2 solutions.

It’s inevitable that we will see the same happen with Bitcoin L2s. Scalability layers are essential to onboarding 1 billion people onto Bitcoin.

All roads lead to Bitcoin, and all roads on Bitcoin lead to Bitcoin L2s. This is the most exciting time for the Bitcoin community in recent memory. For example, the Lightning Network uses channels between participants, so that multiple transactions can be handled without waiting for the slower main net to confirm single exchanges. Another is Stack which is like Ethereum on Bitcoin which enables smart contracts settled on Bitcoin.

Of course there are some Bitcoiners that are upset, but I would compare it to having a favorite restaurant that suddenly becomes extremely popular. Yes, you as a regular may be upset that now you have to wait longer and prices have increased, but it also means that the restaurant is unlikely to close. Actually they are building a second and third floor to accommodate more guests!

Looking back, we will see this as the moment when the Bitcoin ecosys-tem came to life.

ALEX has announced on Twitter that its building the fastest BRC-20 DEX. Tell us more about it!

Dr. Chiente Hsu(CEO and CoFounder of Alex):
ALEX is building B20 which is the first orderbook for BRC20 tokens. It’s like dYdX for BRC-20 tokens and other Bitcoin (L1) native assets. What’s exciting about this is that Combining L1 indexing & L2 optimization, B20 by ALEX delivers the best of both layers.

At the moment, if you want to do anything on Bitcoin now, you need to pay very high fee. L2 like Stacks works fine and every tx on Stacks works fine, because they are aggregated and settled in one-go (and therefore we can afford a higher gas fee as a group). Beauty of L2.

Also, Bitcoin does not have smart contract capability. anything a bit more sophisticated, such as DeFi related, like DEX, lend/borrow, it won’t be able to handle it. So we need to build these functionalities on a L2, like our orderbook. Moreover, to speed up even more, we use off chain optimization but settle all onchain. So users get the CeFi like trading experience. We match buyers and sellers based on their limit and market orders. You can place limit orders to buy or sell at a specific price, and these orders are added to the order book. Market orders are uted at the best available price in the order book.

It has more advanced trading features like stop-loss orders, and lending/borrowing services.
Price discovery is more efficient in orderbook DEXes, as it’s based on the bids and asks of market participants rather than the Uniswap type AMM that is based on mathematical formula.

What do you see as the major challenges BRC-20 faces that ALEX is solving? How will token listing on B20 start and how soon until it’s launched?

Dr. Chiente Hsu(CEO and CoFounder of Alex):
So really B20 By ALEX solves two pain points:
1) Current market places for BRC20 are traded like NFT, with fragmented liquidity. ALEX’s B20 solves this by offering CEX like experience with long tail assets
2) Current BRC20 marketplace transaction speed relies on Bitcoin block confirmation time, taking 20-40 minutes with limited throughput. B20 by ALEX employs rollup technology to greatly enhance finality time and throughput, enabling larger transaction volume with lightning speed

The listing of BRC20 projects has already started. And our orderbook will be launched most likely next Wednesday. to start using it, you will need to download wallets such as Hiro and xVerse. Xverse / Hiro wallets already support Stacks Bitcoin/BRC20, so interaction between L1 and L2 from the wallet perspective is ready

We will publish a medium article very soon. If you have any questions while using the orderbook, pls join our community by our official website, our community leader will help you.