GateLive AMA Recap-AlexLab

2023-05-15, 06:15

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## 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, <a href="/id/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> 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 <a href="/id/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> protocol called “taproot” which basically improved two things. One is MultiSig and the other one is to relaxes the _script_ and input limits on <a href="/id/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> transactions, i.e. optimize block space usage,. And it was activated in November 2021.

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

3)domodata invents the brc-20 standard, a json format for minting tokens via ordinal in_script_ions 
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_script_ Object Notation or JSON files onto <a href="/id/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> 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 in_script_ion 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 <a href="/id/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a>. 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 in_script_ions with over $27M in Ordinals fees paid to miners. Ordinals has solved <a href="/id/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a>'s fee problem.)

To put that into context the current average <a href="/id/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> transaction fee is about $31 whereas back in January it was around $1.

The surge in transactions has been over 99% BRC-20  text in_script_ions for mints and trades. The trading activity surrounding these tokens has contributed to daily transactions on the <a href="/id/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> 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 <a href="/id/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> as a blockchain: By driving up transaction fees, Ordinals incentivizes miners to continue securing the network and attracts developers to the ecosystem, 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 <a href="/id/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> is in demand by users, it means miners are incentivized to continue securing the network, it means <a href="/id/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> 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 <a href="/id/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> mempool, <a href="/id/price/ethereum-eth" target="_blank" class="blog_inner_link">Ethereum</a> is still more expensive to use. <a href="/id/price/ethereum-eth" target="_blank" class="blog_inner_link">Ethereum</a> gas fees are why there has been so much developer activity around L2s like <a href="/id/price/polygon-matic" target="_blank" class="blog_inner_link">Polygon</a> and Arbitrum and inevitably <a href="/id/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> congestion leads to L2 solutions.

It’s inevitable that we will see the same happen with <a href="/id/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> L2s. Scalability layers are essential to onboarding 1 billion people onto <a href="/id/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a>.

All roads lead to <a href="/id/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a>, and all roads on <a href="/id/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> lead to <a href="/id/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> L2s. This is the most exciting time for the <a href="/id/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> 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 <a href="/id/price/ethereum-eth" target="_blank" class="blog_inner_link">Ethereum</a> on <a href="/id/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> which enables smart contracts settled on <a href="/id/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a>.

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 <a href="/id/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> 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 <a href="/id/price/dydx-dydx" target="_blank" class="blog_inner_link">dYdX</a> for BRC-20 tokens and other <a href="/id/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> (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 <a href="/id/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> now, you need to pay very high fee. L2 like <a href="/id/price/stacks-stx" target="_blank" class="blog_inner_link">Stacks</a> works fine and every tx on <a href="/id/price/stacks-stx" target="_blank" class="blog_inner_link">Stacks</a> 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, <a href="/id/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> 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 executed 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 <a href="/id/price/uniswap-uni" target="_blank" class="blog_inner_link">Uniswap</a> 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 <a href="/id/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> 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 <a href="/id/price/stacks-stx" target="_blank" class="blog_inner_link">Stacks</a> <a href="/id/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a>/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.

<div class="blog-details-info">
<div>Author:** GateLive**, Gate.io Team
<div class="info-tips">\*This article represents only the views of the researcher and does not constitute any investment suggestions.
<div>\*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all cases, legal action will be taken due to copyright infringement.
</div>

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