Original title: An On-Chain Interview With the Founder and CEO of UniSat
Original Author: Leonidas
Original source: ord
Compile: hiiro
A conversation about the potential of BRC-20, the meteoric rise of UniSat, network congestion, and the future of Bitcoin.
Hi Lorenzo. You're the founder and CEO of UniSat, right?
Yes. Since 2018, I have been actively involved in development and research in the crypto space, especially related to Bitcoin. UniSat initially consisted of a small group of developers proficient in Bitcoin technologies such as SegWit, Lightning Network, and TapRoot.
Our team is primarily made up of developers who take a fast and pragmatic approach, constantly exploring novel ideas, conducting experiments and developing prototypes. This heuristic thinking allows us to iterate quickly and deliver innovative solutions to our growing audience.
Additionally, we've made a conscious decision to maintain a focused and compact organizational structure for the foreseeable future, allowing us to focus on delivering exceptional value to our audience.
When did you first hear about Bitcoin? What attracted you so much that you would build a company on it?
Bitcoin has had a profound impact on both the world and my personal journey. Back in 2015, I wrote an in-depth article on how Bitcoin could revolutionize the gaming industry. It was during that exploration that I conceived the idea of a decentralized, continuous virtual open world built on top of Bitcoin, utilizing the combination of blockchain + magnet + Git. Over the course of eight years, I have gradually and steadily built up a relatively strong confidence that blockchain technology, when combined with various technologies, has the potential to make it nearly a reality.
Compared to other modern blockchains, Bitcoin is as simple and straightforward as described in the Whitepaper. While the crypto industry has seen complex solutions and innovative concepts emerge around blockchain technology, Bitcoin's implementation has remained simple and straightforward, like the C language in computer science, while retaining its inherent power and elegance. Huge untapped value waiting to be discovered and exploited.
In 2023, the introduction of ordinal numbers and the BRC-20 standard opens up new possibilities for Bitcoin, and we see more exciting developments to come.
You don't see it that way when all the other developers in the ordinal space dismiss Domo's original proposal for the BRC-20 standard as a ridiculous idea. You see the potential of the BRC-20. What do you see that other people miss?
BRC-20 is far from being just a replica of ERC-20. It has proven to be a compelling innovation.
What caught our attention was that it showed how a command-based system could simply be effectively implemented on top of inscriptions, operating independently of the underlying UTXO hierarchy graph within the boundaries of the Bitcoin blockchain.
By "floating" above the execution layer, BRC-20 achieves remarkable simplicity and flexibility, albeit at the expense of the deterministic benefits provided by UTXO hierarchical graphs, such as consistency and coherence.
This simplicity is of great value to both Domo and UniSat. Furthermore, the true potential of BRC-20's flexibility has not yet been fully realized, and we expect it to gradually unfold in the near future, bringing more benefits and possibilities to the table.
UniSat became an overnight success. Within the first two weeks of launch, you've seen over $25 million in transaction volume and sparked massive excitement about minting BRC-20 tokens, driving Bitcoin fees from an average of $2 to over $30. How did it feel to go through that moment and know that what you built caught the attention of the entire crypto space?
Frankly, we were not prepared for the surge in demand.
During that time, the process at each stage was heavily congested. The influx of inscriptions into the mempool presents significant challenges to their inclusion in blocks. Due to high traffic and configuration issues, our nodes are constantly being rejected from the main network. As a result, the backlog has accumulated highly batched Inscription transactions beyond our ability to process them. Additionally, our enthusiastic users generated a high volume of requests, further stressing the system.
Most infrastructure components were overwhelmed by the intensity of the situation. This highlights the fragility of the entire system and underscores the need for comprehensive solutions. We learned this lesson the hard way and realized that solving the challenge wasn't just about solving the internals of the UniSat infrastructure. It also needs to address the overall network capacity constraints. We recognize the importance of finding a sustainable approach to ensure a prosperous future for the entire system.
UniSat is known to have been working behind the scenes with several centralized exchanges such as OKX to improve the infrastructure behind the BRC-20 protocol. What role do you think CEX plays in the BRC-20 ecosystem? How do you see them co-existing with DEXs like UniSat?
They generally bring a larger audience into the game, which is good for them. UniSat welcomes CEX and we have been helping with this through our API/documentation in May and June. Frankly, we don't see them as adversaries of any kind. It's not about politeness or hypocrisy. The logic behind it is very simple.
UniSat is constantly innovating and experimenting within the Bitcoin space. We often find ourselves venturing into uncharted territory, solving open and complex problems. Larger players like CEX rarely take on these challenges as they prefer the risk-averse approach of waiting for validation and betting. UniSat, on the other hand, plays an exploratory game, finding communities and tribes before a full proof of concept, as we experienced with the introduction of the BRC-20.
By charting our own course and exploring unproven territory, we are able to pioneer new ideas and technologies that may not be immediately embraced by established players. This unique approach allows us to uncover opportunities and push boundaries in the crypto industry.
The biggest criticism I hear about UniSat is that you have had so much success with the BRC-20 indexer and DEX that UniSat poses a centralization risk to the BRC-20 protocol. What would you say to someone raising such concerns?
Our indexer is open source and now we have an on-chain indexer provided by Alex. These developments have resulted in decentralized implementations for public witnessing, as well as proprietary implementations optimized for improved performance and responsiveness. Both approaches have value and are expected to coexist for the foreseeable future.
Our goal is to make the indexer service accessible to everyone with simple "one-click" setup. By empowering individuals to run their own indexers, we aim to alleviate concerns about centralization risk. We believe this decentralized approach will help create a more robust and resilient ecosystem.
In the field of exploration, new continents are usually discovered by individual explorers. We think "being criticized for centralization" is a key benchmark if we are doing the right things and gain mass adoption. And we're really passionate about solving the next challenge that leads to "centralization risk" :).
What are the most pressing issues currently facing the BRC-20 agreement? What do you think should be done to solve it?
BRC-20, as a protocol, provides developers with a solid foundation to build on, thanks to its simplicity and stability. We really value Domo's efforts to preserve and maintain this simplicity.
Having said that, it is becoming increasingly important to introduce a way to efficiently and flexibly extend the protocol without creating unnecessary complexity. This urgency stems from the diverse needs and use cases being explored with BRC-20.
We are actively discussing with those involved how to address the design and implementation aspects of protocol scalability and versatility. While we're still refining these ideas, we expect to be able to share more details in the coming weeks, once the concepts reach practical maturity.
What are some of the exciting initiatives that UniSat has been working on? What are you most excited about in the short term for BRC-20?
In the coming weeks, we will be delivering functionality to support recursive collections of inscriptions, as well as product-level improvements such as Trustless Auction and mobile app development. These additions, while important, are only part of our ongoing effort.
There are some really exciting things (usually I tend to be conservative, but yeah, it's exciting) that we're experimenting with. It is related to the Bitcoin mainnet congestion issue I mentioned above.
This congestion issue is a major concern for us. The last time there was congestion, people probably thought "well, they didn't expect it to happen so soon, they weren't ready". But within a few months, the main network may become congested again as interesting applications emerge.
If this happens, it could lead to doubts about the scalability of Ordinals on Bitcoin, and people could start to have doubts about the system's ability to handle existing volumes, let alone accommodate future growth. We are fully aware of this potential situation and addressing congestion has become a top priority for UniSat.
This is likely to happen if we do nothing. This is the elephant everyone has seen for years and pretended not to. In the coming weeks, we will reveal more details about our efforts to solve this challenge. We are committed to finding a sustainable, scalable solution to congestion that ensures the long-term viability and confidence of the entire system.
What is your vision for UniSat? Where do you want UniSat and BRC-20 to be in ten years?
Bitcoin’s impact on fintech is undoubtedly enormous. However, over time, other blockchains emerged, demonstrating strong capabilities in various fields. This has led to a narrowing of the Bitcoin narrative, largely around its role as "digital gold" and "crypto reserve." Unfortunately, Bitcoin's potential as a technology to serve billions of people has been overlooked due to concerns about its performance, programmability, and scalability. In addition, the fixed block reward for miners has been the main source of profit for many years, and since 2009 it has been expected to change to a service fee driven model.
Fortunately, the introduction of ordinal numbers, including protocols like brc-20 and others built around it, has opened up new possibilities for us. These protocols allow external value to be injected into Bitcoin, potentially enabling miners to earn more than they can through fixed block rewards. This presents an opportunity for Bitcoin to make a paradigm shift, ultimately establishing itself as a sustainable chain with a healthier incentive model.
On top of that, brc-20 represents a remarkable (no pun intended :p) experiment. The 'floating' nature allows for a more flexible, loose connection to the underlying physical structure. This property opens up the potential for different evolutionary paths.
To understand why this is important, we can examine how the Lightning Network (LN) has evolved over the years. LN was originally designed to be tightly integrated with Bitcoin transactions, which led to significant limitations in its application. It was too complex (to be understood and used by users) and too rigid (to be extended by developers). Typical users unfamiliar with concepts such as open-closed channels, inbound-outbound capacity, and transaction routing tend to opt for hosted solutions, resulting in limited adoption of LN in day-to-day transactions. Rather than being a "micropayment network" as originally envisioned, the LN primarily serves as a "settlement network" between merchants and wallet providers, failing to achieve widespread adoption.
New experiments like ordinal and brc-20 draw lessons from these challenges and lead us down an exciting path of discovery that emphasizes simplicity. They provide an opportunity for Bitcoin to grow into an organic system with the original chain as its backbone.
UniSat serves as a dedicated development team dedicated to assisting the growth of Bitcoin. Our goal is to transform Bitcoin from a single blockchain with numerous incompatible protocols scattered in the wild to an organic, multifunctional system. We prioritize compatibility, composability, parallelism, and scalability, laying the groundwork for Bitcoin to evolve over the next few years.
