Coin World News Report:
Author: Derek & Alana Levin, Variant Fund; Translation: Finance xiaozou
We are pleased to announce that we have led the seed round of financing for Satflow, a new professional trader DEX based on the Bitcoin network.
1. Why choose Bitcoin? Why now?
Variant has been tracking the Bitcoin ecosystem for many years. In the past 12 months, we have noticed three potential trends that are in the early stages of spawning new waves of development experiments and user interest:
(1) Development of new asset forms
For many years, the community has been against development and construction on the Bitcoin base layer. But it seems that the public’s appetite has changed. This is the first time we have directly tokenized on Bitcoin. The release of the Ordinals, BRC20s, and Runes standards represents significant progress in increasing the productivity and transaction volume of Bitcoin. Each new token standard improves the token trading experience (for example, Runes is the newest and most fungible among the three standards and can trade more decentralized US dollar funds). We believe that the experimentation with new asset standards on Bitcoin will continue from here.
(2) Major efforts to make Bitcoin and its ecosystem more programmable
The Bitcoin ecosystem contains nearly $900 billion in potential capital. So far, the limitations of Bitcoin’s scripting language have been considered the core obstacle to building expressive applications around this capital. But we have begun to see some meaningful new attempts to expand Bitcoin’s utility. One core protocol upgrade called OP_CAT is underway, which will enhance the ability to build applications directly on L1. Broadly speaking, at least a dozen Bitcoin smart contract layers (commonly known as “Bitcoin L2”) have received venture capital. Various efforts are jointly transforming Bitcoin into a powerful and attractive development platform.
(3) Institutional adoption and interest
Institutional adoption and interest are primarily driven by the launch of Bitcoin spot ETPs. Since its launch in January of this year, ETPs have attracted over $70 billion in new investments. Research shows that owning assets can generate stronger interest and loyalty to these companies when making purchasing decisions. We believe that owning Bitcoin may have a similar effect: as more and more users start holding Bitcoin in their investment accounts, curiosity about what else people can do with Bitcoin will grow. Over time, this will attract more interest and more new users to interact directly on the chain.
The impact of these positive trends is that in the past 12 months, the Bitcoin ecosystem has received more resources, developer mindshare, and user attention than at any other time in its 15-year history.
2. A DEX designed for professional traders
As the Bitcoin ecosystem develops, user diversity is also increasing. There is now a thriving community of professional traders conducting transactions directly on the Bitcoin network. However, product innovation within this group has always lagged behind, especially compared to professional tools and exchanges in other ecosystems. Satflow changes all of this.
Every transaction in the Bitcoin ecosystem has three core stakeholders: buyers, sellers, and miners.
– Miners want to earn as much fee income as possible.
– Sellers want competitive bids and fast execution.
– Buyers want reliable execution, a large inventory, and sufficient liquidity.
Today, many DEXs tend to focus on only one or two stakeholders. Satflow has built a DEX that considers the interests of all three stakeholders, resulting in a first-class trading experience, especially for professionals and market makers.
Supporting the Satflow system is an innovation called Memflow. Memflow is an infrastructure that organizes and displays real-time mempool data for buyers on the Satflow interface. It also helps categorize transactions and provides reliable data streams for key events on the chain, whether it’s new coin minting, major trades, or runic creation.
Before Memflow, buyers and sellers had to wait at least 10 minutes (the duration of Bitcoin block confirmation) to discover asset prices. Even for the most dedicated Bitcoin traders, such delays make the Bitcoin trading experience far less smooth than on blockchains like Ethereum or Solana. Memflow solves this problem and does so in a way that serves all stakeholders. By accessing high-fidelity mempool data, the order book traders can trade with unconfirmed assets in the pool. Buyers can see inventory updates in real-time and adjust their positions accordingly. Sellers can have a clearer understanding of buyers and at what price their assets will be sold. In addition, miners can benefit from more fee income brought by a more active market.
Satflow’s founders Robert, Alex, and Anatolie are well prepared to embrace the opportunity to build a DEX specifically for professional traders. The three founders are early experimenters with Ordinals in the Bitcoin ecosystem – both as collectors and active traders. This gives them first-hand understanding of the challenges faced by existing infrastructure and earns them the respect of traders and developers who are deeply loyal to the broader Bitcoin ecosystem.
Over the past six months, their DEX has been in the testing phase. They carefully planned visits from over 250 Bitcoin traders, fine-tuning many features to provide the best on-chain trading experience. The DEX is now publicly available.