$1000SATS $ORDI In-Depth Analysis of InSwap
1. Why Did It Appear?
· Background: Since the Ordinals protocol ignited the Bitcoin ecosystem in 2023, a large number of “non-monetary assets” based on Bitcoin have emerged, such as NFTs (inscriptions) and fungible tokens (BRC-20). These assets themselves lack an efficient on-chain trading environment like Ethereum's smart contract capabilities.
· Demand: Initially, trading these assets relied on OTC and centralized exchanges, which provided a poor experience and fragmented liquidity. DEXs like InSwap were created to offer a decentralized on-chain trading experience for Bitcoin-native assets.
2. How Does It Work?
· Not directly running on the Bitcoin mainnet: The Bitcoin scripting language has limited functionality and cannot support complex AMM logic. Therefore, InSwap is typically built on Bitcoin Layer2 (such as RGB, Stacks, Merlin Chain, etc.) or sidechains.
· Cross-chain asset mapping: Through cross-chain bridges, the inscription assets on the Bitcoin mainnet are “mapped” or “wrapped” into liquidity tokens on L2 for quick pairing and trading.
· Multi-ecosystem aggregation: Its vision extends far beyond Bitcoin, by integrating cross-chain bridges from other chains, allowing users to trade assets from ecosystems like ETH and SOL, aiming to become a “full-chain DEX aggregation point.”
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