$SATS ordi, RIF

InSwap: Native DEX on Bitcoin Layer 1

1. What is it?
InSwap is a decentralized trading protocol based on Partially Signed Bitcoin Transactions (PSBT) and the UTXO model. It operates directly on the Bitcoin Layer 1 chain, without relying on sidechains or bridges, enabling peer-to-peer swaps of Bitcoin ecosystem assets (such as BRC-20, ARC-20, Runes, etc.).

2. Core Technical Principles
· PSBT (Partially Signed Bitcoin Transactions): This is the underlying technology Bitcoin uses to enable complex transactions (such as multisig and swaps). InSwap leverages PSBT to allow both buyers and sellers to jointly construct and complete an atomic swap without fully exposing their private keys.
· UTXO Model Adaptation: Unlike Ethereum’s account model, Bitcoin uses the UTXO model. InSwap has designed an ingenious mechanism to match buyers’ and sellers’ UTXOs and ensure atomicity of swaps (i.e., either the entire swap succeeds or fails, avoiding the risk of one party paying without receiving).
· Permissionless Liquidity Pools: Anyone can create trading pairs and provide liquidity, similar to the Uniswap V2 model.

3. Key Features and Significance

·👍🏻 True Decentralization and Security: Assets always remain in users’ own wallets, and trades are completed on-chain via PSBT, without the need to deposit into third-party centralized platforms. No single point of failure and no custodial risk. 🐮

· Native Layer 1 Interaction: All operations occur on the Bitcoin mainnet, inheriting Bitcoin’s security and finality, with no reliance on cross-chain bridges.

· Unlocking Liquidity: In centralized markets like UniSat, BRC-20 trading uses an order book model, resulting in fragmented liquidity. InSwap uses an automated market maker (AMM) model to aggregate liquidity in pools, providing instant swap experiences and serving as a key building block for DeFi in the Bitcoin ecosystem.

· Cross-Protocol Compatibility Potential: Its design can theoretically support any Bitcoin asset protocol based on UTXO and PSBT, such as Runes, ARC-20, etc., offering excellent scalability.