KuCoin AMA With ALEX Lab (ALEX) — Automated Market Making and On-Chain Lending Services In The World Of DeFi

Dear KuCoin Users,

Time: January 18, 2024, 12:00 PM- 1:05 PM (UTC)

KuCoin hosted an AMA (Ask-Me-Anything) session with the BD Lead of ALEX Lab Foundation, Hadan Esperidiao, in the KuCoin Exchange Group.

Official Website: https://alexgo.io/

Whitepaper: https://medium.com/alexgobtc/whitepaper-1-automated-market-making-of-the-yield-token-pool-b7739fcee038

Follow ALEX Lab on Twitter, Telegram and Discord

Q: Could you please introduce ALEX?

Hadan: ALEX started in May 2021. Co-founders Chiente Hsu and Rachel Yu, come from extensive TradFi careers building quantitative businesses for Wall St. banks.

If building Bitcoin DeFi seems contrarian now, it was much more so in 2021 before Ordinals. We chose Bitcoin, because DeFi needs Bitcoin: without the security and immutability of Bitcoin, DeFi may never see mass institutional adoption.

Then, the challenge we faced is that DeFi requires programmability, and Bitcoin is not a smart contract protocol, it does send or receive very well, but that’s it. That brought us to launch on Stacks, a Bitcoin smart contract L2. We grew to become the largest project on Stacks, and then the most valuable Bitcoin DeFi protocol, then Ordinals really changed everything.

Bitcoin transformed from pure money layer to data layer, but the UX of using PSBTs on the L1 was clearly a big hurdle to broader adoption. Since then our focus has really been on integrating Bitcoin with the programmability and scalability of L2s. Abstracting away wallet complexity, bridge complexity, and simply creating a seamless and elegant user experience makes all the difference in terms of adoption. We see ALEX as the gateway to Bitcoin.

Q: Please explain more about ALEX as the “gateway to Bitcoin”

Hadan: Through ALEX Bridge, which we’ve transitioned into XLink Bridge, we’ve connected liquidity on Bitcoin and BRC20 tokens, to Bitcoin L2s, Ethereum, and Binance chain.

If you go to this link and launch the app, you can choose from the Bitcoin Bridge, BRC20 Bridge, and EVM Bridge.

We’re currently integrated with 5 Bitcoin wallets, including Unisat, OKX, Bitget, Xverse and with one click, our multi-sig federated bridge will move your Bitcoin into “aBTC” which is wrapped BTC on ALEX, or any other Stacks token.

The BRC20 Bridge allows you in one-click to peg-in or peg-out your BRC20 to trading on the B20 Order Book or on our AMM DEX.

The EVM Bridge, you connect your Metamask wallet, and it enables you in one click to move Tether, USDT, on ETH or BNB into sUSDT (wrapped Tether on ALEX) and from ETH, you can also move WBTC into aBTC on ALEX and from Binance BTCB into aBTC on ALEX.

We’ve created a very user-friendly and easy-to-use interface to move Bitcoin liquidity across blockchains and Bitcoin layers to access new opportunities.

Q: What is an example of the opportunities that would attract Bitcoin or EVM capital to Bitcoin Layers?

Hadan: First there’s the opportunity to participate in emerging crypto projects on the ALEX Multichain Launchpad. The Launchpad is closely integrated with the XLink bridge. Projects can launch tokens on Bitcoin, Stacks, Ethereum, and Binance. The smart contracts and IDO lottery remain on the Stacks layer. Still, the distribution through the bridge enables multichain liquidity to come in to participate, and for token distribution that goes out to winners.

And following every IDO, we also open a secondary market on our AMM DEX so users can start trading the new tokens right away.

A great example is we recently launched Ordz Games $ORDG, the first Bitcoin GameFi project, with over 80x oversubscription of over 190 Bitcoins.

Second, there is an opportunity to bridge over liquidity to hold and trade BRC20 tokens on our Orderbook or AMM DEX, as well as Stacks layer tokens such as ALEX.

Third, users can move liquidity on Ethereum or Binance into Bitcoin L1 and vice versa in a decentralized way without the need of a CEX.

Q: How does ALEX address concerns that BRC20 is an experimental token standard with indexing challenges?

Hadan: BRC20 tokens have been enormously popular. The top token ORDI alone has a market cap well over $1B. That popularity is driven by the fair mint process which is strongly community driven, and the appeal of holding your tokens directly on the Bitcoin L1.

It is true that Bitcoin does not read BRC20 inscriptions, the global state of balances has so far relied on off-chain centralized indexers.

Shortly after we opened our BRC20 Orderbook, we began leading an effort with Domo, creator of the BRC20 standard and ALEX advisor, along with key off-chain indexers such as Unisat, OKX, BestinSlot, Hiro System, and Xverse to create a Bitcoin Oracle.

The Bitcoin Oracle provides a consensus layer for indexers to recognize transactions, and uses L2 programmability to independently read the Bitcoin state to verify transactions.

This is a key infrastructure element that increases the security and immutability of BRC20, and we’ve just published our APIs and the Alpha Release can be visited here.

The Oracle framework we’ve created will also work with other meta-protocols, such as Atomicals or runes, as they gain traction and popularity.

Q: Why did ALEX decide to build DeFi on Bitcoin?

Hadan: Bitcoin does not need DeFi, but DeFi needs the security and immutability of Bitcoin to achieve mass adoption. As a team of veteran Quants with almost a century of Wall St. experience, we didn’t build ALEX to compete with Ethereum or Solana DeFi liquidity but to compete with traditional finance itself.

Bitcoin is unique, with a track record going back 15 years, transactions have never been reversed, it has survived multiple 80% drawdowns, and its core protocol is still very much the same since day one. And PoW is at the core of the success because PoW is to trust in the laws of physics. It anchors Bitcoin to the physical realm.

We see Bitcoin acting as the data layer that builds a universally inclusive financial economy, allowing emerging economies and unbanked communities to access savings and investments products that can offer financial stability.

Someone can use their mobile phone and go to a shop, load their salary into a mobile payment app that is connected to the infrastructure we are building at ALEX using Bitcoin as its payment network to earn yield on their salary, convert to other currencies such as USD and send money to anyone around the globe within 30 minutes.

Q: What does it mean to say, “ALEX is the finance layer of Bitcoin”?

Hadan: We believe that all roads in crypto lead back to the security and value of Bitcoin. And we believe that all roads on Bitcoin will lead to L2 solutions.

The modern economy is built not just instantaneous payments, but on finance, which is the transfer of value over time. Finance throughout history has involved legal contracts, and on blockchain it requires smart contracts. Bitcoin needs the programmability of L2s to build a Bitcoin economy.

Bitcoin also needs scalability. It is currently physically impossible to onboard 1 billion users on the Bitcoin L1. The network isn’t built to handle it. L2 solutions can bundle a large number of transactions and settle them in a single Bitcoin transaction.

The question then is how can users easily move their capital from the L1 to L2 or between different L2s or to other blockchains?

That is the role the ALEX Layer plays in providing seamless integration that removes the complexity of different wallets, so that without even having to think about what chain they are on, users can transact intuitively with the assurance of the security of Bitcoin settlement. Creating a Web2 “one click” experience is key to mass adoption.

Q: What are some exciting milestones that are coming to ALEX in 2024?

Hadan: We have a steady pipeline of emerging projects on our launchpad that users can participate in. A huge development, that will be transformational for Bitcoin layers and ALEX, is that Stacks layer plans to ship the Nakamoto release before the Bitcoin halving.

The Stacks L2 currently operates on Bitcoin block time, which is an average of 15 minutes. This is because Stacks prioritizes security and decentralization, but the wait time causes a slow user experience.

The Nakamoto release will reduce Stacks block times from 15 minutes to 5 seconds, and Stacks will fully inherit Bitcoin’s re-org resistance. Onboarding millions of new users will be enormously facilitated with the much faster block times.

Stacks will also release sBTC in 2024. It is a challenge representing Bitcoin on smart contract layer without the custodial risk of centralized solutions such as WBTC or of fixed federations like the Liquid Network.

sBTC will create an open and dynamic federation that will enable the most trust-minimized representation of Bitcoin on a smart contract layer. This is a key element to allow Bitcoin’s $800B market cap to enter DeFi and become a yield generating asset.

Q: What future do you see of Bitcoin DeFi and ALEX?

Hadan: Initially, what we are seeing is the most successful experiments on other chains come home to Bitcoin. So there will be an initial “catch up” phase where DeFi on Bitcoin will strongly resemble projects we’ve already seen. After the “catch up” phase, I predict Bitcoin DeFi will diverge because its potential market cap is so much greater and because of great institution acceptance of Bitcoin, it would make Bitcoin DeFi a more natural point of entry for major institutions into DeFi.

There’s over $360 Trillion in real-world assets that progressively will become tokenized, because the objective truth is that blockchain is a superior technology for the settlement of wealth. As these tokenized assets then look to transact securely, efficiently, trustlessly they will turn to Bitcoin DeFi because we are build on the strong foundation of security. That is where the infrastructure we are building now will find its ultimate use case.

And I think it will happen faster than we think, because human civilization is the history of technology, Bitcoin and blockchain is the superior technologies for the storage and transfer of wealth, and its dominance of global finance is inevitable.

Q: Could you please provide us with your social media profiles?

Hadan: Here’s our Official Social Media Accounts:

Website, X (Twitter), Medium, Docs , Github, Whitepaper,YouTube and Discord.

Q: Can you provide a rundown of the top 3 Impressive features that set your project apart from its competitors?

Hadan: Here are the top three impressive features of ALEX Lab:

1) In just two years we're the most valuable Bitcoin DeFi protocol on CoinMarketCap and CoinGecko. All transactions on ALEX settle on the security of Bitcoin L1.

2) We are unique as a team. We’re founded by veteran Wall St Quants. They say "don't invest in ideas, invest in people" and our team are career long professionals who have built billion dollar quant business for major financial institutions. Our financial experience and network is unmatched.

3) In just two years we have delivered:

- AMM DEX, staking and yield farming

- B20, first BRC20 Orderbook DEX

- Bitcoin Oracle providing a consensus layer for BRC20 indexing

- Multichain Launchpad for emerging projects

- XLink Bitcoin bridge, linking Bitcoin, BRC20 tokens and L2s with Ethereum, BNB and multichain liquidity.

Q: What are the key factors that contribute to the security and resilience of the ALEXGO trading platform? How does the team stay ahead of potential security threats and vulnerabilities?

Hadan: Excellent question. In crypto we have an emergent technology and there will always be technology risk, but we do everything that we can to minimize it including:

1) Two independent security audits for our smart contracts and features we release

2) An on going Bug Bountu with ImmuneFi invisible on the bottom corner of our app with $100K in rewards

3) ALEX and the Stacks Layer is coded in Clarity, not Solidity. Clarity is an intentionally Turning incomplete language to avoid the major security vulnerability of Turning complete languages like Solidity.

Clarity is also a "decidable language" meaning it is not compiled, it is broadcast to the blockchain as it is written, it remains human readable, it is not compiled into machine code, so there is much greater transparency, and if an exploit should occur it is quick and easy to identify, fix and attempt to reverse because there is "nowhere to hide" the code is visible to everyone.

Q: What is your strongest advantage that you think will make your team lead the market?

Hadan: Our strongest advantage is that we made the decision to build on Bitcoin, and Bitcoin is the original crypto, the oldest crypto and the most decentralized and secured blockchain.

Major financial institutions have already shown they are much more comfortable with Bitcoin than other blockchains.

Bitcoin is unique with a track record going back 15 years, transactions have never been reversed, it has survived multiple 80% drawdowns, and its core protocol is still very much the same as on day one. And PoW is at the core of the success, because PoW is to trust in the laws of physics. It anchors Bitcoin to the physical realm.

The current market cap of crypto is it is still relatively small to the global finance. The $2T market cap for all of crypto is less compared to Apple and Microsoft alone.

ALEX is building for the ocean of money of traditional finance that will flow into crypto in the years to come and we are not competing with ETH and SOL. We are competing with Traditional Finance itself and fighting for $360T in the global wealth that will be tokenized and look to trade on the most secured network which is Bitcoin

Q: How has ALEX optimized its platform for an easy user experience?

Hadan: Great question. We believe seamless integration and intuitive user design are the keys to mass adoption.

For example,you may take a look on our Bridge. You connect a Bitcoin wallet (Unisat, OKX, Bitget, Xverse, Leather and more to come) and a Stacks wallet (also 5 selections) and with one click you can transfer Bitcoin into the Stacks L2 where you can earn yield, participate in IDO, swap for other tokens, or move it to USDT on ETH (by connecting Metamask wallet)

And this is not a CEX, it is all Decentralized and non-custodial, and it creates a Gateway for Bitcoin, and its $800B market cap to flow into Bitcoin DeFi, become a yield generating asset and be connected to the multichain.

And this is just the beginning. Our bridge is just a few months old and we willl continue to add more wallets, and we will be Bridging to more blockchains.

🎁 Participate in the ALEX Lab AMA quiz now for a chance to win $10 in ALEX!

The form will remain open for five days from publishing this AMA recap.

KuCoin and ALEX Lab have prepared a total of $2,000 in ALEX to give away to AMA participants.

1. Pre-AMA activity: $800 in ALEX

2. Free-ask section: $50 in ALEX

3. Flash mini-game: $400 in ALEX

4. Post-AMA quiz: $750 in ALEX

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