CoinJieNet Report:
Author: Derek & Alana Levin, Variant Fund; Translation: Financial xiaozou
We are pleased to announce that we have led the seed round 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 major potential trends that are in the early stages of generating new waves of development experiments and user interest:
(1) Development of new asset forms
For years, the community has been opposed to development on the Bitcoin base layer, but public appetite seems to have changed. This is the first time we have directly tokenized on Bitcoin. The release of 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 interchangeable among the three standards, and can trade more decentralized US funds). We believe that the experimentation of 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 US dollars in potential capital. So far, the limitations of Bitcoin’s script language have been considered a core barrier to building expressive applications around this capital. But we have begun to see meaningful new attempts to expand Bitcoin’s utility. A 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 working together to gradually transform 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 this year, ETPs have attracted over 70 billion US dollars in new investments. Research shows that owning assets can generate stronger interest and loyalty from consumers 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 will interact directly on the chain.
The impact of these positive trends is that in the past 12 months, the Bitcoin ecosystem has gained 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 evolves, the diversity of users is also increasing. There is now a thriving community of professional traders trading directly on the Bitcoin network. However, the product innovation of this group has always lagged behind, especially compared to professional tools and exchanges in other ecosystems. The emergence of Satflow changes all that.
Every transaction in the Bitcoin ecosystem has three core stakeholders: buyers, sellers, and miners.
– Miners want to maximize fee income.
– Sellers want competitive bids and fast execution.
– Buyers want reliable execution, ample inventory, and sufficient liquidity.
Today, many DEXs tend to focus on one or two stakeholders. Satflow has built a DEX that considers the interests of all three parties, 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 classify transactions and provides reliable data streams on-chain for key events, whether it’s new coin minting, major trades, or rune 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, this delay makes the Bitcoin trading experience far inferior to that 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, both sides of the order book can trade using 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. Additionally, miners can benefit from increased fee income from a more active market.
Satflow’s founders, Robert, Alex, and Anatolie, are well prepared to seize the opportunity to build a DEX designed for professional traders. The three founders are early experimenters of Ordinals in the Bitcoin ecosystem, both as collectors and active traders. This gives them firsthand understanding of the challenges faced by existing infrastructure and has earned them the respect of traders and developers who are deeply loyal to the broader Bitcoin ecosystem.
For the past six months, their DEX has been in the beta testing phase. They carefully planned visits from over 250 Bitcoin traders, fine-tuned many features, and provided the best on-chain trading experience. The DEX is now live.
