BRC-100's first DEX is launched. How does 100Swap unlock the BTC layer 1 DeFi password?

On April 26, Bitcoin’s inscription protocol BRC-100 officially launched its first DEX application called 100Swap. The platform governance token is BOS, 60% of which has been fairly launched on Christmas Day, and the current number of holders is 6231. It is worth noting that 100Swap is different from other DEXs in the Bitcoin ecosystem. It can be summarized into the following technical innovations:

• 100Swap is the first DEX built on BRC-100, a programmable protocol stack based on Ordinals;
• Since the BRC-100 protocol is the first layer-one protocol focused on the DeFi entry of the BTC ecosystem, 100Swap is the first fully decentralized DEX in the first layer of the BTC ecosystem;
• It is the first application to implement Uniswap’s product logic on BTC;
• It is the first 100% secure and decentralized inscription swap that introduces a state machine model;
• 100Swap can not only trade BTC, BRC20 and other assets, but also has the advantage over other Swaps in that it is an asset issuance and trading ecosystem built on the BRC-100 protocol;
• The first Bitcoin Swap with liquidity mining function;

100Swap is a basic application built on the BRC-100 protocol. Let’s take a look at the three important protocols and extended protocols currently released by BRC-100.

**1. BRC-100 basic protocol definition: **

The BRC-100 protocol essentially describes a token with computing power and status. Tokens deployed based on the BRC-100 protocol are called applications. BRC-100 supports nesting and inheritance. Nesting refers to creating sub-applications for applications to achieve modularity of applications and expand the computing power of parent applications. At the same time, the BRC-100 protocol supports protocol extension. Any protocol can inherit BRC-100 or its extended protocol to extend the parent protocol. The BRC-100 protocol consists of three parts: attributes, operations, and computing operations. Operations are not extensible, ensuring that all tokens based on BRC-100 and its extended protocols are compatible with each other, and both attributes and computing operations can be extended through extended protocols.

**2. 100Swap’s BRC-102 extended protocol definition: **

The BRC-102 protocol inherits from the BRC-100 protocol and is the first application-oriented extension protocol in the BRC-100 protocol stack. The BRC-102 protocol defines an automatic market-making method based on the “constant product formula” (x*y=k) for a pair of tokens based on the BRC-100 protocol stack. There are three roles in the protocol: liquidity providers, traders, and liquidity pools. The liquidity provider is responsible for providing the two tokens in the currency pair to the liquidity pool. The two tokens can be tokens based on any protocol in the BRC-100 protocol stack, such as BRC-100, BRC-102, BRC-103, etc. Traders can exchange one of the tokens in the pair for another in the liquidity pool. The liquidity pool, based on the AMM algorithm of the “constant product formula” (x*y=k), will automatically provide liquidity to traders and is implemented by the BRC-100 indexer. Through the cooperation of the three roles, BRC-102 can achieve fully decentralized, trustless, self-custodial, censorship-resistant, and permissionless token exchange on Bitcoin Layer 1.

**3. 100Layer’s BTC-104 extended protocol definition: **

BRC-104 is a liquidity staking/re-staking pool protocol that defines how to wrap BRC-20 assets and BTC into BRC-100 assets through staking, and how to distribute BRC-100 asset rewards to BRC-100 assets, BRC-20 assets or BTC pledgers. BRC-104 is the Asset Wrapping protocol and Yield Farming protocol of the BRC-100 protocol stack.

**From the definition of the protocol, we can see that the 102 protocol is implemented by 100Swap. What we need to understand here is how 100Swap implements the decentralized AMM inscription mechanism of BTC through three operation steps. **

First of all, the operating logic of 100Swap is exactly the same as that of Ethereum’s Uniswap, but because of the particularity of the inscription, the protocol founder @MikaelBTC implemented it on the first layer of BTC through the following three innovative steps:

lStep1: burn3 (burn the asset you want to sell)

Step 2: Swap (complete decentralized trading of assets)

Step 3: Mint (imprint the purchased assets into the wallet)

If a user has a certain asset and wants to exchange it for another asset, then only the above three steps are needed to achieve 100% on-chain interaction. All operations are completed by consuming BTC as Gas. It is a decentralized DEX like Uniswap, which is very smooth and innovative.

So, how does 100Swap do this? This requires understanding a technical innovation, that is, the state machine model. Compared with Ordinals and BRC-20, the biggest innovation of BRC-100 is the implementation of the UTXO+ state machine model, which allows the entire transaction process of 100Swap to be completed on Bitcoin Layer 1. The transfer of burn2/burn3 inscriptions does not actually transfer assets to the recipient, but only completes the conversion from UTXO to state. In this protocol, the transfer of user assets must meet the preset rules, and no custody of user assets is required.

**100Swap meets the rigid demand for security of BTC holders, so can it promote explosive growth of the BTC ecosystem after halving? **

At present, the BTC ecosystem after the halving has been attracting much attention, and new narratives are also emerging in the BTC ecosystem. The protocols that have emerged include Ordinals, BRC-20, Rune, and BRC-100, which focuses on the first layer of DeFi. These protocols have a common feature that they can complete the issuance of assets in the BTC ecosystem. However, the first protocol that can be used for DeFi applications is BRC-100. With the launch of 100Swap, the DeFi of the BTC ecosystem also has an entrance. Asset issuance + DeFi infrastructure are the dual advantages of BRC-100.

Looking back at the development of Ethereum ecology, we find that DeFi is a key step in the rise of ETH. The ERC-20 asset issuance has given Ethereum an ecological foundation, but decentralized financial DeFi applications such as Uniswap, AAVE, and MakerDAO are the boosters that really make Ethereum explode. What the BTC ecology needs is a safe layer of DeFi protocols and ecological applications. 100Swap built on the BRC-100 protocol is expected to become Ethereum Uniswap or even surpass the Ethereum ecology, because the BTC ecology is obviously more imaginative than Ethereum.

In addition, it is worth knowing that according to the BRC-102 and 104 protocols, we can specifically see that 100Swap can also stimulate asset issuance, trading, LP formation, pool addition and other DeFi operations through liquidity mining. Project parties can also reserve their own tokens on the BRC-100 protocol and customize the token economic model, which will greatly stimulate the entry of developers in the BTC ecosystem, so that it is no longer only a Meme issuance method. In particular, there is also an airdrop protocol 105 in the BRC-100 extension protocol, which will greatly reduce the project party’s airdrop cost by saving Gas. Since BRC-100 is an extensible decentralized computing protocol based on ordinal theory, its imagination is still very huge. Because it interacts and integrates with BTC through a layer and DeFi, it is worth looking forward to recreating the glory of Ethereum in the past.

learn more:

BRC-100 Protocol Documentation:

100Swap official website:

BRC-100 official index:

BRC-100 protocol founder social media: