Author: Weilin, PANews
In early August, BitMEX co-founder Arthur Hayes announced the launch of Airhead, the first NFT series on his Ordinals. According to reports, the series was created in cooperation with the OYL wallet, which is an investment project of Hayes' family office Maelstrom.
“Each Airhead is an inflatable balloon-like character generated using recursive art to visually represent the size and value of the user’s digital portfolio at the time of minting,” Hayes wrote in a blog post. “With 10,000 Airheads to choose from, these characters are ranked ordinal and differentiated to reflect the weight of assets on the leaderboard, making it a fun and competitive way to display wealth.”
OYL raised $3 million in the Pre-Seed round earlier this year, led by venture capital firm Arca, with participation from Arthur Hayes, Web3.com Ventures, and BRC-20 creator Domo. OYL's core products are the OYL wallet and the meta-protocol Protorunes that adds programmability to Runes. In addition to the co-launched inscriptions, OYL's CEO and co-founder Alec Taggart also introduced two core features of the OYL wallet, aggregators and transaction behavior visualization.
Recently, PANews interviewed OYL CEO and co-founder Alec Taggart to tell the story behind the founding of OYL wallet and Airhead. The following is the edited transcript of the interview.
PANews: As a founder, what opportunity led you to start your crypto journey? What projects have you led? What impact did these experiences have on the creation of OYL?
Alec Taggart: I started my career as a management consultant for financial services companies, such as banks, asset managers, and payment institutions. During that time, in late 2016, I joined the firm's blockchain innovation department, and we did a lot of consulting for large enterprise companies and banks on how to use and think about this technology, and also developed some strategies for some of the early companies at the time. It was obvious that many entrepreneurs, both in traditional finance and in the cryptocurrency space, were building fintech applications, and what they really wanted to build was a permissionless infrastructure based on blockchain. But they were limited by the banking infrastructure, the regulatory environment, and the compliance environment.
I later left and joined BitDao, a DAO created by the Bybit exchange, and was involved in many partnerships, incubation projects and transactions, and worked on multiple projects in the DeFi and Web3 space, mainly in the Ethereum ecosystem. BitDao later became the Mantle L2 Ecosystem Fund. Around the beginning of 2023, when Ordinals really took off, I hadn't paid much attention to Bitcoin before because its programming capabilities and tooling for different assets were somewhat stagnant. A lot of infrastructure and applications were built in other ecosystems like Ethereum. But when I saw Ordinals happen, it was a new turning point. Now there are Bitcoin native assets issued directly on Bitcoin, so we started to re-examine a lot of the infrastructure built on Ethereum, and we founded OYL to rebuild this infrastructure for Bitcoin, suitable for new assets, new asset classes, and to adapt to Bitcoin's unique architecture and architectures such as Ordinals, BRC-20, Runes, and UTXO models.
PANews: OYL was founded in August 2023. What motivated you to found OYL? What is the size of the OYL team? Are there any stories worth sharing during the process of building the team?
Alec Taggart: The team at OYL is probably the most interesting part. Every significant startup has a very strong team of people who build together and get through the hard times together. Our team is currently on a journey of about 8 years. Our CTO Ray Pulver was previously the CTO at Framework Ventures, where he and I worked on the insurance product. My other co-founder Cole Jorissen worked at Dharma and OpenSea, and he worked for me at Windranger as the head of design brand and product design.
So, when Ordinals happened in early 2022, I flew to New York to meet Cole and said, "Hey, this is going to be very important. We need to drop everything and go all in." So we sorted out a series of ideas together. Cole and I have incubated and helped more than 20 crypto companies, helping them think about plans and products from 0 to 1.
We were thinking about a lot of different ideas. Once it was more clear, I reached out to Ray and told him what we were doing. He was really interested. He said, “That’s so interesting.” I was actually at ETH Denver and went to the first Ordinals meetup at ETH Denver in February. There were about 20 people there. I was still saying hi to a lot of my friends at the time and saying I was now a Bitcoin Maxi, and people were asking me, what are you working on? When I got on a flight back to New York, I reached out to Ray again. He agreed to join us and brought in three developers to work with us. That was our early iteration of the team.
One of the best developers I've ever worked with at a fintech company also contacted me that same week and said, "Hey, I'm bored at work. Do you have anything I can join?" So he joined us. So the original core team was made up of a lot of people I've worked with at different companies I've worked at or founded.
Fast forward to now, we are building two major products. Our core product is an infrastructure business called Sandshrew. Sandshrew is a Bitcoin RPC product similar to Alchemy on Ethereum, providing all the useful Bitcoin data you need to build any application, including Runes, BRC-20, Ordinals, etc. We also have an indexing product called Metashrew. Metashrew allows you to build custom meta-protocols and indexes to transform token states. We have developed two products based on these: one is the consumer-facing OYL wallet. We also developed a meta-protocol called Protorunes on our infrastructure. Protorunes is a meta-protocol that allows Runes asset prototypes to be burned into programmable meta-protocols or sub-protocols, making them programmable directly on layer one, combined with the Runes asset class. So, on the back end of these products, we have 4 developers working on the data indexing part and 4 developers working on the wallet part.
PANews: OYL Wallet aims to connect inscriptions, Runes and Bitcoin ecosystem to achieve asset conversion. What is its core technology? What is its market positioning and goals?
Alec Taggart: The OYL wallet can actually be seen as an expression of our ability to build infrastructure tools. Our goal is to provide the best data and the best tools for exploring the discoverability of the Bitcoin system in the simplest possible way.
One of the features we're most excited about is the launch of the aggregator. With this aggregator, you can buy Runes directly in your wallet, across multiple markets for BRC-20. We take partially signed Bitcoin transactions from multiple markets and use the aggregator to bundle those transactions together, abstracting away all the transactions, signatures, inscription transactions, and clearly showing the fees for doing those operations. You can buy assets from different markets with one click. This is a very advanced, non-custodial, trustless product that allows you to buy these assets directly on Bitcoin. This is an aspect that we are very excited about. As more swap products emerge on BRC-20, Runes, and other assets, we will integrate them into the aggregator. In addition, we have very good transaction fee and transaction simulation features.
One of the problems with Bitcoin is that a lot of the activities that people are doing, like trading, exchanging, sending, etc., there is no block explorer like Etherscan that can actually show you what you are doing. Most of the time, it just shows the Bitcoin transaction and the split of UTXO. But because we have very excellent transaction simulation and backend indexing, we are able to bring these transactions together and show users what they are actually doing. When a user receives this Ordinals, they can know the previous asset exchange. This is actually a very clear visualization of the user's asset ownership and asset interaction. So these are two of the most important aspects for us.
Third, we are launching a series of Ordinals with Arthur Hayes called Airhead. The entire whitelist and minting experience is in the wallet. You download the wallet, you go to the whitelist. There is a leaderboard based on the assets held in the wallet address (BRC-20s, Runes, Ordinals, Bitcoin). The top 10,000 users on the leaderboard get whitelisted. At minting, the series is a series of 10,000 balloon characters, and there are 10 states of inflation. The people at the top of the leaderboard get the fattest balloon character. So at minting, they will have a very inflated balloon character or a skinny balloon character. This uses dynamic features on Bitcoin, like recursion, to bring all of these layers together. It's very interesting because it's a product in itself. For us, it's about how do we build this experience in the wallet, make the hardest asset in the world to trade easy, and provide a really trusted and enjoyable experience in one place.
PANews: What was the original intention of establishing the Inscription Project Airhead? What is the most interesting thing about this project?
Alec Taggart: Arthur Hayes was one of our original investors, his fund Maelstrom was actually one of our first investors a year ago. One of the things he wanted to do was create a series of Ordinals. He had never worked on an NFT project before, but now that was a possibility on Bitcoin. He wanted to do something unique on Bitcoin and be as crazy and unique as his personality. This is the first project. We've worked with him over the past year to create a series that really fits his personality and is new and different. The artwork has a real rigor and looks almost like Jeff Koons. If you're familiar, Jeff Koons' balloon animal sculptures look almost like glass.
Another motivation is, as a wallet, there are other wallets out there. How do we differentiate? When we launch this wallet, how do we make this experience engaging, show our capabilities, and also make it a fun game for people to compete for the whitelist. They will transfer their assets over, actually see the functionality of the wallet, and see what happens when they transfer their assets, and really feel all the power of OYL.
PANews: Are there any early stories you can share between Arthur Hayes and you? What impact did Hayes' involvement have on OYL?
Alec Taggart: When Ordinals first came out, Arthur directed his team to look for a really good investment opportunity. This was a year ago, very early on. We were their only and initial Ordinals investment. He was very interested in the user experience perspective, which was consistent with our perspective on other ecosystems. He calls himself an evolved Bitcoinist, which fits in well with our personalities.
He's been very helpful because he has a really great macro perspective on the industry as a whole. He founded BitMEX, which is a successful business, and he's also a big business leader. So he's been very helpful as we think about entering the market. Especially now as we're developing this Ordinals series, he's making sure that our goals are aligned with the goals of the wallet, which is brand new and also designed to meet consumer needs. So from that perspective, he's been providing us with really good advice and helping us think more clearly.
PANews: OYL recently proposed the editable rune Protorunes. What are the innovations of Protorunes? Can you introduce the concept and goals of Protorunes?
Alec Taggart: First of all, Protorunes is possible because of the index product we built, Metashrew. Metashrew is an open source framework that allows for the construction of fully transparent, open source meta-protocols and indexes, and architects them on a WASM virtual machine. In addition, in our backend product Sandshrew, we built a very good closed-source orchestration layer that can be hosted, so anyone who uses this framework to build an index, meta-protocol, or specific data source can directly transmit data through our unified RPC and API endpoints. Anyone who builds a meta-protocol can build new things on top of BRC-20, Runes, UTXO model inscription models, increasing the amount of experimentation. Any developer can get data directly from the API, which is very important for building wallets, DeFi applications, or swap products. To show the power of this tool, we created Protorunes.
Protorunes builds on this, it allows for the use of Runes assets, which currently have limited operability. Runes can be written or issued, their transfers can be tracked, and they can be traded through partially signed Bitcoin transactions. Similar to BRC-20, but it lacks the programmability that most people are used to. Protorunes allows a Runes asset (which exists in UTXO) to be built on top of the Runes protocol using RunesStone messages. We have a concept called Protoburn, where you can Protoburn it into a UTXO and it still exists in the UTXO, with the transfer capabilities and all the functionality running on top of Runes. The asset can then be used in sub-protocols within the Protorunes framework. The amazing thing is that this actually allows for deterministic, fully transparent programs that are consistent with the WASM virtual machine architecture to be built in a completely decentralized way and can be tracked on-chain. This greatly expands what can be built, everything from other ecosystems, DeFi applications, exchange products, lending stablecoins, synthetic assets, derivatives, games, etc. can now be built with the Runes asset class. This really gives the Runes team and developers new capabilities and possibilities.
PANews: BRC20 and Runes have been developing for a while. BRC20 has created a wealth effect and attracted a lot of attention to the BTC derivative market. However, the subsequent mature Runes protocol did not receive the expected market response. How do you view their popularity changes and market fluctuations? As the popularity decreases, many people begin to predict the decline. How do you view these negative views?
Alec Taggart: I think there are a couple of reasons for that. First of all, BRC-20 was the first to come out, and that created what you could call a mini-bull market, where everybody was rushing to inscribe these assets, and people were building a lot of infrastructure around it. Exchanges started listing them. I would say that initially BRC-20 had a more international impact, and a lot of people in Asia were very interested in BRC-20. So Runes was like Casey's response to an alternative protocol. It had a different design, it existed in UTXO, it didn't have to deal with transfer inscriptions and multi-transfers. I think there was a huge push to launch it at the halving, and there was a lot of excitement around its creation on the day, and Runes had preceded things like Ordinals like Runestone and RSIC. There was a lot of excitement on the day it launched. I think it was a little overheated, and then people were looking forward to what would happen to the price of Bitcoin at the halving, and the market as a whole had been in a slump. So I think there's been a lot of activity, and it's just following a very typical market trajectory. Looking back at the past four halvings of Bitcoin, the price of Bitcoin usually didn't start to rise until 3 to 6 months after the halving.
So a lot of people think Runes is going to solve all the problems, but it actually doesn't offer anything more in terms of programmability than BRC-20. Now we're entering the next phase where a lot of companies are starting to offer BRC-20 programmability, building programmability modules that support EVM smart contracts and indexers. We're doing Protorunes, and there's other things going on, like OP_CAT is not fully mature yet, and there are other meta protocols that have emerged since we announced Protorunes. I think people are just waiting for a time when they can do more with Runes, it's more discoverable, it's more user-friendly, and it's more attractive to people who want to play games and do things on Bitcoin.
PANews: Currently, there are wallets in the BTC ecosystem such as OKX, Ordinals Wallet, Unisat, Xverse Wallet, etc. How do you view the wallet landscape? As a rising star, what strategies do you have?
Alec Taggart: There are a lot of really great wallets. When you look across the space, a lot of the original wallets started with the Stacks ecosystem and then added functionality for Ordinals, like Xverse and Leather. Xverse is probably one of the most versatile wallets, it supports a lot of different assets, you can connect to a lot of different applications, very similar to the traditional wallets you're used to using. OKX obviously has a great marketplace, they have an exchange, a lot of people in Asia use this wallet. And then there's Unisat, they built their own marketplace, they're working on Fractal Bitcoin, they're very focused on BRC-20. So I think for us, the core differentiation is the emphasis we put on Runes and Protorunes.
Also, our infrastructure index product is something we want other wallets to use, which provides better data for consumption indexes and new protocols, increasing utility. So we want all wallets to start adopting our framework to expand the market. We built these products for wallets and developers, not just for ourselves. Our differentiation is mainly reflected in, for example, providing a very excellent user experience in the wallet, abstracting the data and excellent discoverability. Everything you want to do is completely trust-minimized and non-custodial, directly in the wallet, and building abstractions around it.
So, we want to position our wallet as a high-quality wallet with an incredible and enjoyable user experience that excels not only in Bitcoin, but also in the entire ecosystem of wallets.
PANews: From your perspective, what are the new opportunities for the BTC ecosystem in the future? What trends are worth looking forward to?
Alec Taggart: To follow up on your previous question about the market, if you look at the growth of Ethereum, back in 2018, there were very limited things that Ethereum could do. Mostly, you could use it to issue ICOs, create ERC-20 tokens or utility tokens, but there weren't really many decentralized applications (dApps) that could be used. It was just a promise of a better future, but issuance is the core factor that drives innovation. Then you had Maker, Synthetix, Uniswap, and these DeFi applications started to appear. Then you had stablecoins and synthetic assets, and then features like yield farming, liquidity mining, etc., really started to incentivize people to participate.
So, these are the things that need to happen to spark a lot of innovation and keep people interested in it. So there have to be really great tools and visualizations to show how these things work and what the data looks like so that other people can follow along. There also needs to be more things like stablecoins or wrapped BTC to increase liquidity in the space. There also needs to be more yield opportunities for Bitcoin, and then there also needs to be basic functionality around exchange, lending, and yield. That's the next step that everyone is looking forward to. So there's going to be a lot of opportunities for people to explore as people work on building these features at different levels.
PANews: In this context, what are OYL’s future plans? Will it issue tokens and launch its own economic model?
Alec Taggart: OYL will issue its own token in the future. With this Airhead series, we also launched the concept of Whale Pass. You can think of Whale Pass as the founding sequence collection of the whale OYL ecosystem. The first benefit of buying an OYL pass is that you actually get an Airhead. You can think of this as not only prepaying for minting, but also getting an Airhead, and there will be a virtual balance on the pass that will increase every block. This is a way that we can continue to use to do some interesting things. Our plan is to make sure that all the people who are building these primitives can cooperate, we will also integrate these primitives into the wallet, and there are many things to do.
Protorunes is another piece of our future plan, not just to help establish the standard, but also to build protocols on top of it. This will also be able to touch every part of our ecosystem. We are building through wallets and indexing tools, so this will be a key part of creating more liquidity directly in the layer 1 system, which will also be completely integrated with our business and closely related to our token.
For us, it’s all about building enough tooling and surface space with wallets, infrastructure, and indexes to create opportunities for developers and consumers to realize that this is real and there’s more that can be done, while increasing the long tail of experimentation on Bitcoin.
Additionally, these things are future-proof. When innovations like OP_CAT emerge on layer 1 and even layer 2 of Bitcoin, they give people more tools to experiment and build on, and allow OYL and the OYL wallet to be the best platform for discovery and access within its ecosystem.