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brc20-swap launch, detailing its development history, product model, and future expectations.

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The launch of BRC20-swap is also a progress for the entire ecosystem.

Original Title: "BRC20-Swap Goes Live: A Detailed Explanation of Its Development, Product Model, and Future Expectations"

Original Source: Wuhai, PANews

Due to the fact that the trading mechanism of Ordinals' ecological assets is almost entirely based on the mode of selling through pending orders, its liquidity has always been a key focus of the ecosystem. In July 2023, Unisat, which combines engraving, trading markets, and wallets, announced the upcoming launch of brc20-swap in order to improve the liquidity of ecological assets. This product was also tested and launched on October 30th.

This article from PANews will explain to you the development history, product model, and future expectations of brc20-swap.

brc20-swap Development History

On September 20th, 2023, Unisat sent out brc20-swap Early Access invitation inscriptions to 620 addresses. The screening criteria were not specified.

1) Active community members who trade at least 1 BTC on UniSat Marketplace between July 16th and September 20th.

2) Active community members who accumulate at least 500 UniSat points by engraving inscriptions through UniSat between July 16th and September 20th.

3) Unisat OG PASS holder (snapshot block height is 808559).

On October 10, 2023, UniSat officially released the brc20-swap mainnet launch schedule and other details. It gradually distributed a commemorative inscription called brc20-swap Prime Access for free to community users, and holding this commemorative inscription allows participation in the early testing of the brc20-swap product. It was distributed through the official Discord channel and Twitter user lottery. The total distribution quantity is 654, and the current floor price on the secondary market is 0.0067 BTC.

The settlement and synchronization of transactions to the Bitcoin mainnet are handled by the sorter. In terms of transaction fees, brc20-swap refers to the fee standard currently used by UniSwap and charges a 0.3% service fee to all participating users. Approximately 1/6 (0.05%) of this fee is collected by UniSat, while the remaining 5/6 (0.25%) is distributed to all liquidity providers of the various trading pairs. The difference is that brc20-swap uses brc20 assets "sats" as transaction fees.

On October 30, 2023, UniSat officially announced the 14 assets supported in the initial stage of brc20-swap. The screening criteria were assets that had at least 15 days of trading activity on the UniSat market in the past 30 days and a non-zero median trading volume in the past 30 days. After the announcement, the assets involved also saw significant gains due to positive expectations.

Product Mode

The product is divided into trading, liquidity pools, and data overview, which is similar to the dex form on the EVM chain. Users need to first recharge their assets to the brc20-swap module through "inscribe TRANSFER" before trading, and the recharge confirmation process takes 3 blocks.

brc20-swap is implemented through modular expansion, with each module existing independently of brc20-swap. The advantage of this approach is:

1) Unlicensed development makes developing new modules for brc-20 a process that does not require a license;

2) Isolation execution, ensuring that the execution of any single module does not affect the operation of the core protocol and other modules when problems occur.

3) Consensus upgrade, when the majority of indexers recognize and implement the indexing of specific modules, it can transition from the current black module to the white module and become a component of the BRC-20 protocol.

However, the expansion mode of the black module has a drawback: users cannot freely extract assets. Unisat improves this by designing a dynamically adjustable form, which allows for extraction when others deposit more assets than the amount to be extracted. The advantage of doing this is to avoid the mode of arbitrary issuance on the EVM chain, but the disadvantage is that users lose a certain degree of asset liquidity and convenience.

When the behavior of the black module is understood and executed by users, gradually becoming reliable and accepted by more indexers, the product transitions from the black module to the white module, achieving consensus upgrade. Users can then freely deposit and withdraw assets.

In addition, because the BRC20 protocol and the entire Ordinals ecosystem are still in the early stages, Unisat has a significant influence and reputation, providing complete transaction and balance query indexing services for the protocol, with a centralized risk of monopoly. Its modular architecture allows more service providers to participate, thereby achieving more decentralized indexing.

Future Expectations

Users in the Ordinals community often complain about low liquidity and limited capacity for funds to enter, which forces large EVM chain holders to wait and observe. Brc20-swap utilizes the brc20 protocol as the underlying asset foundation to achieve the first native transaction in the Ordinals ecosystem. The constant optimization of liquidity, which means continuously expanding the capacity for funds to enter, is a significant improvement for the entire ecosystem. Therefore, the launch of brc20-swap is also a step forward for the ecosystem.

Meanwhile, Unisat has announced that 2% of the transaction fee for brc20-swap will be donated to the L1F Foundation, in which brc20 protocol developer domo is involved, to promote the development and further optimization of brc20. In addition, UniSat will open source the complete explanation and verification source code of brc20-swap to promote early support for indexers.

All signs indicate a cooperative attitude, rather than a monopolistic approach to ecological benefits. The ecological development cycle of Ordinals is relatively short, and requires all parties within the ecosystem to work together to expand the cake and achieve mutual success.