14 Dec 2023
5 Major Milestones of ALEX, the Finance Layer of Bitcoin
ALEX, the DeFi hub on Stacks and Bitcoin, has launched a series of new products over the year. This includes a bridge, BRC-20 token products, aBTC, releasing the Bitcoin Oracle and starting the Bitcoin Fund to catalyze the growth of Bitcoin DeFi. In this article, we’ll go through the project’s milestones and what they mean.
Innovation on Bitcoin is back. With the advent of Ordinals, BRC-20 tokens, a nearing Bitcoin spot ETF in the US, and various new Bitcoin Layer 2s, the Bitcoin Economy is hotter than ever. A leading project in this sector is ALEX, the top Decentralized Exchange on the Bitcoin Layer 2 Stacks.
Calling ALEX just a DEX wouldn't do the DeFi platform justice, as it offers much more than just the swapping of tokens, including a bridge, launchpad, and BRC-20 token product. The team has consistently been adding new products to its stack throughout the bear market. It's about time we take a good look at the recent accomplishments of Alex, the self-touted "Finance layer of Bitcoin."
Before we take a look at what's new, first a few words on the project's product suite and vision. ALEX started as the first decentralized exchange on Stacks that includes swapping, liquidity pools, staking, yield farming, and a launchpad for Bitcoin Economy projects (both for Stacks and BRC-20 launches). Since the start, the goal of ALEX has been to become the leading DeFi hub for the Bitcoin Economy.
ALEX has been around since January 2022. It has since launched 5 projects via its launchpad, processed daily trading volumes of almost $10m on its busiest days, and at the time of writing has about $55m in assets locked on its platform (TVL). Now that we're up to speed, let's go over the new products the stellar Alex team has released since its early days.
For a complete overview of ALEX, check out our deep dive here.
In general, blockchains are isolated islands with their own languages and rules. This has been hampering the industry’s growth as it’s very inefficient to build the same applications over and over again and have liquidity and users fragmented. Bridges started being built to connect different blockchains with each other and allow for the transfer of assets and information between them. Stacks was one of these isolated islands, until the launch of the ALEX bridge. The ALEX Bridge, initially linking BNBChain and Ethereum with Stacks now also enables asset transfers between Bitcoin and Bitcoin L2s such as Stacks.
While the bridge started as a part of ALEX, the product is now operating as a seperate entity XLink. This is mainly due to ensure aligned incentives and a complete focus on the security and interoperability of the bridge. The governance of XLink is proposed to be overseen by XLinkDAO, a dedicated entity integrating $ALEX holders and validators in its decision-making process.
Read more about Xlink here.
Testament to ALEX’s pace of development has been the project’s rapid rollout of products for Ordinals and BRC-20 tokens. These explosive innovations have revolutionized the Bitcoin blockchain by enabling the addition of metadata that can enable a Bitcoin-variant of NFTs and tokens. Capitalizing on this breakthrough, ALEX was quick to explore new products as soon as BRC-20 tokens were introduced. This led to the launch of B20, the first and fastest BRC-20 Orderbook DEX.
June 2023, ALEX introduced the first-ever BRC-20 token Initial DEX Offering (IDO) on their Launchpad. Additionally, ALEX launched its own BRC20 token, $B20. The ALEX Decentralized Launchpad stands out as the first capable of distributing Layer 1 assets, such as Ordinal NFTs and BRC20 tokens, through Layer 2 programmability, marking a significant achievement in the realm of Bitcoin DeFi.
Finally, the ALEX. team has only recently unveiled a BRC-20 native launchpad that spans across a variety of blockchains. It’s early stages for this one, but given the team’s track record and the emerging hype around anything built on Bitcoin, it could be wise to keep a close eye on this.
For detailed information, check out the B20 User Guide.
The recent alpha release of the Bitcoin Oracle by ALEX represents a significant advancement in Bitcoin's decentralized finance (DeFi) sector, focusing initially on enhancing the security and functionality of BRC20 tokens. This crucial development integrates smart contract functionalities into Bitcoin's infrastructure, addressing its original limitations in handling complex token operations. The Oracle's inception is a collaborative effort involving key players in the crypto space, including Domo, ALEX, BIS, Hiro, OKX, Xverse Xlink, and UniSat, highlighting the alignment of stakholders in the Bitcoin Economy and a collective commitment to evolving Bitcoin’s DeFi capabilities.
At its core, the Bitcoin Oracle serves as an "indexer of indexers," aggregating data from various off-chain indexers to establish a tamper-proof, censorship-resistant source of truth for all Bitcoin L1 asset events like Ordinals and BRC-20 tokens. This feature is pivotal in ensuring transactional integrity and accuracy within the Bitcoin DeFi ecosystem. Furthermore, ALEX's initiative to decentralize the governance of this on-chain oracle underscores a significant move towards democratizing the control and enhancement of Bitcoin’s financial infrastructure, setting a new standard for security and transparency in the DeFi landscape.
For more information on the Oracle, click here
aBTC is a relatively new product developed by ALEX that provides a way for Stacks users to use a Bitcoin-based asset in DeFi. aBTC is pegged to and backed by bitcoins, similar to WBTC on Ethereum. The design of aBTC is centered around efficiency and practicality, using smart contracts and a multisig wallet system for speed and user-friendliness. This approach is particularly advantageous for users who require rapid and seamless DeFi interactions.
aBTC is different from Stacks' upcoming sBTC, another Bitcoin-backed product that’s yet to-be-launched. While sBTC represents Stacks' approach to Bitcoin DeFi, aBTC is ALEX's answer to integrating Bitcoin Layer 1 (L1) with Stacks Layer 2 (L2), focusing on bridging these layers efficiently. Pegged 1:1 to Bitcoin, aBTC is powered by two key components: the previously launched and described Bitcoin Oracle and the Bitcoin Bridge.
For more information on the Oracle, click here
Finally, the team started Bitcoin Lab. It was initiated by ALEX co-founders Chiente Hsu and Rachel Yu, and is an ecosystem fund created to catalyze the growth of Bitcoin DeFi. Bitcoin Fund provides funding, market access, and technical assistance to developers, aiming to onboard new projects and users, thereby aspiring to increase the Total Value Locked (TVL) and enhancing the ALEX and Stacks ecosystems. The fund also supports builders with composable code modules and unified liquidity, lowering the barrier for finance developers in the Bitcoin space.
The ALEX team has been consistently building throughout the bear market and is set to reap the benefits from this in the coming years. It has consistently identified blockers for DeFi and Bitcoin and has built solutions in collaboration with key Bitcoin Economy stakeholders, including the key parties behind the leading Bitcoin Layer 2 Stacks.
It has become clear that ALEX is much more than a dApp and has been building out an ecosystem in order to fulfill its mission to become the "Finance Layer on Bitcoin". With the upcoming Stacks network upgrade, the continued popularity of BRC-20 tokens and the Bitcoin Economy, and the expectation that there will be many Bitcoin Economy projects conducting token sales via ALEX's launchpads, we foresee continued growth. Add the $ALEX-token to that, which is interwoven into the ALEX ecosystem and designed in such a way that demand for it should grow as the ecosystem grows, and we could be looking at a serious winner as the Bitcoin Economy continues to grow.
We'll be keeping a close eye on ALEX. We’ll keep you updated in our weekly newsletter, which you can subscribe to here!
Disclaimer: Nothing on this site should be construed as a financial investment recommendation. It’s important to understand that investing is a high-risk activity. Investments expose money to potential loss.