The Bitcoin ecosystem is poised for growth, and UTXOSwap built on RGB++ will lead the new era of BTCFi

Author: CKB

Trump's victory will create the most favorable U.S. policy environment for Bitcoin in history. Coupled with the ongoing interest rate cuts by the Federal Reserve, multiple factors are intertwining, and Bitcoin is continuously breaking historical highs. A new round of explosion in the Bitcoin ecosystem is on the verge of taking off.

As a core public chain deeply engaged in the Bitcoin ecosystem for many years, CKB has significant advantages in security, programmability, technical accumulation, and ecological construction, making it the preferred choice for Bitcoin overflow funds. As part of the BTCKB strategy, CKB launched the RGB++ protocol in April this year and upgraded it to RGB++ Layer in July.

RGB++ is not only an asset issuance protocol on the Bitcoin mainnet but also a smart contract layer and cross-chain interoperability layer. It has completed the construction of DEX, stablecoins, launchpads, and other BTCFi infrastructure, and is highly compatible with CKB's Lightning Network, Fiber Network, receiving widespread support from Gate.io, CoinEx, Element, Wizz Wallet, and others.

As one of the representatives of CKB RGB++ infrastructure, UTXOSwap is a native DEX of the Bitcoin ecosystem, effectively addressing the current issues of poor liquidity and high transaction costs in the BTC ecosystem, reducing the costs of asset issuance and trading, while empowering various BTCFi applications and promoting the vigorous development of the Bitcoin ecosystem.

UTXOSwap: The Pioneer DEX of the BTC Ecosystem

UTXOSwap is a Bitcoin ecosystem native DEX protocol built on the improved UTXO model (Cell) and RGB++. It provides users with a better trading experience and better transaction prices through intent-based transactions, aiming to become an important infrastructure for Bitcoin finance (BTCFi).

In terms of technical implementation, when users trade on UTXOSwap, it mainly involves three steps:

Intent Expression: Users express their trading intentions by signing a message that includes the type of trading asset, amount, and other parameters.

Aggregation and Matching: The aggregator collects all users' trading intentions, searches for on-chain and off-chain liquidity resources, and performs intent matching.

Transaction Submission: The aggregator assembles all eligible transactions and submits them on-chain.

For a more detailed interpretation of the UTXOSwap product, please refer to "Interpreting UTXOSwap: How the Top DEX on CKB Was Created."

UTXOSwap has many innovations and advantages:

UTXOSwap can achieve off-chain matching and on-chain verification, allowing it to connect with liquidity providers beyond AMM during the matching phase;

The parallel nature of UTXO can significantly enhance transaction efficiency;

No gas fee is incurred for unfulfilled intents, and the gas for normal transactions is low enough to be negligible. If certain trading pairs are too popular, a local fee model can be adopted to isolate their impact on other trading pairs.

Currently, UTXOSwap supports RGB++ and CKB ecosystem assets, and will expand to support other BTC ecosystem assets like Runes in the future, gradually covering all UTXO ecosystems (such as Bitcoin, Dogecoin, Cardano, Litecoin, Fractal, etc.), building a comprehensive UTXO ecosystem intent trading network, and providing professional liquidity services to meet the liquidity needs of the Lightning Network, promoting the prosperous development of the Lightning Network ecosystem.

UTXOSwap: The Liquidity Hub of the BTC Ecosystem

For assets, security and liquidity are crucial considerations.

The Bitcoin blockchain, based on the PoW mechanism, has been operating stably for nearly 16 years, making it the safest asset issuance platform that meets the security needs of assets. With the maturation of Bitcoin ecosystem solutions like Ordinals, Runes, RGB, and RGB++, asset issuance is becoming increasingly convenient. In the future, diverse assets such as stablecoins, RWA compliant assets, and meme coins on the Bitcoin mainnet will grow rapidly. However, the Bitcoin mainnet faces issues of insufficient liquidity and high transaction costs due to slow block speeds and limited scripting capabilities. UTXOSwap cleverly addresses these challenges using RGB++'s homomorphic binding technology, Leap's bridge-less cross-chain functionality, and the "off-chain computation, on-chain verification" characteristics of UTXO.

Suppose Alice, with dreams of starting a business in the Bitcoin ecosystem, decides to issue an innovative token named "Moon" on the Bitcoin mainnet based on the RGB++ protocol. After the token issuance, she can safely transfer the "Moon" token to the CKB blockchain via Leap's bridge-less cross-chain method, and then create a liquidity pool in UTXOSwap without any permission.

Creating a pool in UTXOSwap not only enhances asset liquidity but also brings the following advantages as product development updates:

Intent-based hybrid trading model: UTXOSwap can achieve off-chain matching and on-chain transactions, and plans to expand features such as supporting Dutch auction logic, dynamic pricing, and AMM-backed transactions after market maker competition.

Customizable curves and fee rates: UTXOSwap's AMM model supports trading pair creators to customize pricing curves (such as curve adaptation for stablecoins) and choose different fee rates to maximize LP returns.

Ultra-low Gas Fee and flexible payments: The gas fee for a single transaction is as low as approximately $0.000002, and it supports off-chain verification to avoid invalid on-chain transactions. Users can pay with any token, and the system automatically handles conversions.

Multi-chain wallet compatibility: Supports Bitcoin, Ethereum, Nervos wallets, and Nostr login, with plans to expand to more multi-chain wallets in the future to optimize user experience.

In the future, UTXOSwap can also achieve cross-chain swaps and other full-chain interaction scenarios based on RGB++'s Leap bridge-less cross-chain functionality. For example, exchanging Seal issued on the BTC mainnet for fulSeal on the Doge chain:

Leap Seal from BTC to CKB (unbind the Bitcoin UTXO bound to Seal and rebind it to CKB UTXO)

Initiate a swap from Seal to fulSeal on UTXOSwap on the CKB chain (Seal --- → fulSeal)

Leap the obtained fulSeal to the Doge chain (bind fulSeal to a certain UTXO on the Doge chain)

In practical use, UTXOSwap will provide an intent solver and corresponding signing tools or wallets to link all steps together, allowing users to complete the above operations in one go during the operational experience.

Assets issued through RGB++ can be freely transferred across Bitcoin and all UTXO chains, while UTXOSwap acts as a liquidity hub in cross-chain interaction scenarios, facilitating cross-chain swaps for any asset.

Additionally, UTXOSwap provides API interfaces and SDKs for developers to quickly and efficiently integrate, significantly lowering the development threshold for BTCFi. By integrating directly within applications or connecting to UTXOSwap, users can receive one-stop services. UTXOSwap, built on CKB and RGB++, will become an important part of the UTXO ecosystem Lego, greatly enhancing the flexibility and functionality of the entire system.

Conclusion

The prosperity of the Bitcoin ecosystem relies on strong support from infrastructure. UTXOSwap, with its innovative technology implementation, brings an exceptional experience to users, showcasing the immense potential of CKB RGB++. It is a powerful booster for the Bitcoin ecosystem and a solid foundation for the future development of BTCFi.