Alkimiya platform has launched a pricing market for BTC transaction fees, allowing users to go long or short, and plans to introduce ETH Gas products, aiming to provide a predictable transaction fee experience. This article is sourced from DeMan and compiled, translated, and written by PANews.
Table of Contents
Alkimiya: Redefining Trading and Management in Block Space
Alkimiya: Innovative Protocol for Synthetic Block Space
Protocol Introduction and Applications
Why is pricing block space crucial?
Core Functions and Market Operations of Alkimiya
BTC Transaction Fee Index
Silica Pool
Trading and Cap Settings
Management of Long and Short Positions
Risk and Contract Security
Education and Resources
Alkimiya recently launched a pricing market for BTC transaction fees on its testnet, marking an important step for the platform in the field of block space resource management. Users can now establish long or short positions based on the average BTC transaction fee index for a specific period. This innovation by Alkimiya is not limited to Bitcoin and is expected to soon introduce ETH Gas products to further expand its service offerings.
As a pioneering block space resource protocol, Alkimiya aims to provide service providers and end users with a predictable transaction fee experience. At its core is a peer-to-peer market protocol that supports the establishment, trading, and settlement of synthetic block space resources, such as BTC transaction fees and ETH baseFee. Through its SDK and frontend markets, Alkimiya enables wallet providers, payment entities, bridge services, traders, and decentralized applications (dApps) to efficiently manage their on-chain fees, optimizing the fee experience for end users.
Furthermore, Alkimiya’s testnet is not only a significant milestone technically but also a testing ground for community participation and innovation. All participants, whether node validators or miners, can engage with this platform by establishing trading positions and contributing their efforts, potentially translating these experiences into tangible economic rewards once Alkimiya’s mainnet goes live.
With the continuous advancement and expansion of blockchain technology, Alkimiya’s efforts foreshadow a trend toward the standardization and predictability of block space resource management, bringing greater stability and new growth opportunities to the entire cryptocurrency ecosystem. We welcome developers and blockchain enthusiasts worldwide to join us in exploring this exciting technological frontier.
Alkimiya is a frontend block space resource protocol aimed at providing service providers and end users with a predictable transaction fee experience. The protocol is based on a peer-to-peer market framework that supports the establishment, trading, and settlement of synthetic block space resources, such as Bitcoin transaction fees and Ethereum baseFee. Through Alkimiya’s Software Development Kit (SDK) and frontend market platform, various service providers, including wallet providers, payment entities, bridge services, traders, and decentralized applications (dApps), can efficiently manage their on-chain fees, optimizing the fee experience for end users.
On a public blockchain, the capacity of all node resources is limited, and all on-chain activities must compete through transaction fees. Block space supply is inelastic, while demand is transient and unstable. The volatility of these fees not only hinders the development of on-chain organizations but also introduces negative externalities affecting ordinary users. While scaling solutions can reduce the consumption of all node resources, the real-time pricing of access to these resources remains a complex market challenge. Currently, most on-chain services and enterprises, when faced with high traffic, either absorb costs themselves or pass them entirely to users, often leading to strong backlash from users. To attract the next billion users, pricing and managing block space resources are crucial.
Alkimiya enables every on-chain surge to have a cascading effect on transaction fees. Previously, users and service providers were almost powerless in the face of fee volatility. Now, they can leverage this exposure through Alkimiya. Users can take long or short positions on specific block space resources (such as the index of average BTC transaction fees within a specific period), and upon entering these positions, users will receive NFTs (ERC-1155) representing their positions in the SilicaPool, drawing inspiration from the intricate complexity and spiritual depth of Tibetan sand mandalas. SilicaPool is a collection of all long and short positions within the same period, where users can enter, trade, or close their positions at any time. For example, in the case of BTC transaction fees, payments at settlement will be based on the median average of BTC/kB in all blocks within the past 15 days.
Market operations are supported by two smart contracts: SilicaPools and SilicaIndex. SilicaPools are responsible for opening, settling, and trading these positions, while SilicaIndex serves as an oracle providing necessary data for settlement. All transactions are completed through an offline order book service, ensuring the efficiency and security of transactions.
Alkimiya plans to introduce products for ETH Gas, further expanding its service offerings to include earning money from on-chain events, hedging against gas estimate risks, and providing fixed gas prices for DApps. Alkimiya’s SDK supports interaction with the Alkimiya network in a TypeScript/JavaScript environment, making it easy for end users to integrate in nodejs or frontend environments.
Furthermore, Alkimiya’s protocol design aims to remain simple and clear to promote high composability. The protocol not only supports the creation of non-expiring gas tokens but can also generate derivative financial products related to block space volatility, such as put options. This flexibility provides market participants with a wide range of strategic choices to better address market uncertainty and complexity.
As the global economy increasingly shifts towards online operations, block space is becoming one of the most valuable resources of the new era. Similar to the history of energy futures markets, the maturity of the block space market may herald the development of broader financial markets. These markets often handle transaction volumes far greater than their underlying physical assets, demonstrating a fundamental principle: “what is priced is managed.” Therefore, effective pricing and management of block space through innovative solutions like Alkimiya are crucial for enhancing the adoptability and user experience of blockchain technology.
Alkimiya represents the next evolution in block space management and trading. By providing service providers and users with a predictable and stable fee structure, Alkimiya aims to address some of the most pressing challenges faced by public blockchains, including fee volatility and market accessibility.
Alkimiya introduces a groundbreaking market mechanism in blockchain technology, aiming to provide participants with a more transparent and predictable transaction fee management experience. Core features include the establishment of the BTC transaction fee index and the operation of Silica Pool, both realized through smart contracts and peer-to-peer market protocols.
The BTC transaction fee index is the underlying benchmark in the Alkimiya protocol used to track the median BTC/kB of all transactions in each block. This index calculates by collecting data from Bitcoin network nodes and using the getBlockStats() RPC endpoint, providing users with an accurate market fee measurement tool. This measurement method ensures transparency and credibility in fee calculation, serving as an important basis for market participants to make trading decisions.
Silica Pool is an innovative concept in Alkimiya that aggregates all long and short positions within the same period. Users can freely enter, trade, or close their positions within the Pool cycle, while the Pool tracks the rolling average of that index. At settlement, the final payment is determined based on the median average of BTC/kB in all blocks within the specified period, providing market participants with a flexible and effective asset management method.
In Alkimiya, users can specify their entry and exit prices by establishing limit orders, which reflect the market’s supply and demand conditions and provide clear price indicators for transactions. Additionally, each Silica Pool has a Cap (ceiling price) to limit the downside risk of long and short positions, ensuring the fairness of transactions and the stability of the market.
Users choose to enter long or short positions based on their anticipation of market trends. Users entering long positions expect transaction fees to rise, while those entering short positions expect them to fall. The management of these positions is achieved through trading or holding NFTs, which can be redeemed for corresponding payments at settlement.
While Alkimiya offers a range of tools and mechanisms to optimize the trading experience and asset management, market volatility and smart contract risks are factors that users must consider. The unpredictability of the market and potential technical vulnerabilities require users to fully understand the risks before participating and take appropriate risk management measures.
To help users better understand and utilize these complex financial instruments, Alkimiya provides detailed tutorials and guides, such as “How to Trade BTC Transaction Fees.” These resources are designed to enhance users’ operational capabilities and market understanding, ensuring that they can make informed investment decisions on the Alkimiya platform.
Through these features and resources, Alkimiya not only simplifies the management of transaction fees but also provides innovative solutions for asset flow and risk management within the blockchain ecosystem. With the continuous development of technology and market expansion, Alkimiya’s innovative features are expected to have a profound impact on the entire blockchain industry.
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