Why am I optimistic about the Bitcoin ecosystem? Because it is just beginning to emerge, and why am I optimistic about the Alkanes protocol?
First, let’s look at some planning and vision from @oylwallet to help you dive deeper into the #Alkanes protocol.
Oyl Wallet builds the first native automated market maker (AMM) on Bitcoin Layer 1 (L1), unlocking the potential of Bitcoin DeFi!
Unlock new features: Alkanes smart contract protocol supports trading, lending, yield generation, breaking the traditional Bitcoin send/receive limitations.
Token Ecosystem: Supports interoperable tokens like BRC-20, Runes, and Orbitals (NFT), promoting composability innovation.
High yield opportunities: Subfrost's frBTC (wrapped Bitcoin) and dxBTC (yield-bearing Bitcoin) are similar to 'high yield savings accounts', allowing Bitcoin to participate in DeFi.
Cross-chain Experience: Learning from chains like Ethereum, Polkadot, developing Metashrew (based on WASM, referencing Polkadot WASMI), addressing Gas measurement and DDoS attack issues for smart contracts, ensuring efficient computation and security.
Oyl Company Vision: The Bitcoin ecosystem lacks unity and has fragmented development. Oyl Corp collaborates with developers to redefine collaborative work and unify ecological goals.
Development History
Building Alkanes and AMM took years, overcoming technical challenges:
Timeline: Alkanes development took 2 years, gradually discovering smart contract infrastructure.
@judoflexchop After over 8 years, developed DeFi exchanges and P2P solutions, laying the trustless foundation for Alkanes.
Challenge: Bitcoin script limitations require building near L1 infrastructure, including Metashrew and Protorunes, supporting token protocols like BRC-20 and Runes.
Gas measurement and DDoS protection are resolved through WASM-based Metashrew, balancing computational constraints and security.
Experience Reference: Learning from Domo and Casey (BRC-20 pioneers), adapting to Bitcoin characteristics, ensuring composability and a trustless architecture.
Subfrost: The core of Bitcoin DeFi
Subfrost enhances Bitcoin DeFi capabilities through token wrapping and yield mechanisms:
frBTC (Frost Bitcoin): A native wrapped token of Bitcoin L1 (not cross-chain WBTC), supporting trading, liquidity pools, and other DeFi functions.
The wrapping process achieves trustlessness through Alkanes smart contracts, and Oyl Wallet plans to integrate automatic wrapping/unwrapping to optimize user experience.
dxBTC (Yield-bearing Bitcoin): Users deposit native BTC into the treasury and receive dxBTC as a 'receipt' that can be redeemed at any time.
frBTC is used for liquidity pools (LP) and lending (coming soon), generating yields, similar to high-yield savings accounts.
Example: lBTC users can join and earn dxBTC yields.
FROST Protocol Token: FROST stands for Flexible Round-Optimized Schnorr Threshold signature scheme, similar to PoS mechanism.
Signers and stakers support wrapping/unwrapping through FROST and frBTC LP.
Fees are used to repurchase and burn FROST (buy-burn mechanism).
Oyl plans decentralized FROST distribution, community earning opportunities to be announced (Airheads have hinted).
Layer 0 Analogy: Subfrost is seen as Bitcoin's 'Layer 0', providing foundational support for the Alkanes DeFi ecosystem.
AMM (Bapp) Detailed Explanation
Oyl's AMM is called 'Bapp' (Bitcoin Application), based on Alkanes' trustless smart contracts, differentiating from multi-signature bridging solutions, supporting advanced DeFi features.
Why is it called Bapp? Multi-signature bridging (such as cross-chain solutions) lacks composability, Alkanes AMM supports trading, staking, lending, and other applications.
Website: app.oyl.io, experience similar to Hyperliquid.
Access and Testing:
Oylnet (Current): Regtest environment, 50-100 people testing swaps, bridging, and staking. Access method: Alkanes developers.
Airheads Whale Pass holders.
Video hides code (view space recording)!
Signet: Public contract testing environment.
Mainnet (Summer 2025): Full launch of trading, staking, bridging, stablecoins (USDT/USDC through QR code access).
User Experience: Supports any Taproot compatible wallet.
Functionality: Portfolio view (Alkanes tokens + LP), swap/wrap labels, liquidity pool data, token browser.
Future support for direct exchanges (no manual wrapping required).
One-stop Dapp experience, users don’t need to leave the application.
Orbitals: Native Bitcoin NFT
Orbitals evolved from NFT proof of concept into a robust framework, showcasing Alkanes' community-driven development.
Development History: Initially a template, Lifo was deployed early, highlighting Alkanes' bottom-up ecosystem (non-VC funded Grant hunter model).
Attract talented developers, focusing on impact rather than funding.
Functionality: Supports true generative art through smart contracts (yet to be fully explored).
Supports on-chain staking + off-chain gameplay (such as Unreal Engine) for smart contract games.
Can bridge BRC-20 and Runes tokens.
XP Integration: The second quarter may provide XP rewards for Orbitals usage.
Oyl-SDK and Game Development
Oyl-SDK provides development support for Alkanes for developers (including game developers), addressing packaging issues for game contracts:
Current Status: Testing on Oylnet, currently does not support game smart contract packaging, limiting direct integration of complex game logic.
Non-mainnet, still iterating.
Game Development Potential: Alkanes game ecosystem.
Thanks to #AlkanesMETHANE group friends for providing this article.