Whether it's UniSat or CAT Protocol (CAT20), the Chinese projects in the Bitcoin ecosystem always give a sense of 'hermit masters'. They toil away quietly, constantly innovating, and are always at the forefront of technology in the Bitcoin ecosystem. Compared to Western projects, they always appear more low-key.
Dotswap is also such a project. From BRC-20, ARC-20 to runes, and then to CAT20, they focus on the swap track and have gradually established their reputation through repeated technical iterations and innovations. After the birth of CAT20, Dotswap quickly updated the CAT20 minting tools, swap, and LP pool, and even launched the CAT20 order book DEX before UniSat. It supports trustless buy/sell orders and shares liquidity with swaps, as well as partial matching of orders.
What allows Dotswap to always respond to market trends at the first moment, and what enables them to persist until they achieve fame after the birth of Fractal and CAT20? Driven by curiosity about these questions, Rhythm BlockBeats interviewed Lin, the co-founder and CEO of Dotswap. In addition to the story behind Dotswap, Lin also shared many of his insights on the current and future state of the Bitcoin ecosystem.
Years of accumulation: BSV's strength feeds back into the Bitcoin ecosystem?
BlockBeats: Does the Dotswap team have experience deeply cultivating in the BSV ecosystem like UniSat and CAT20? If so, how has that experience helped in the birth and development of Dotswap?
Lin: Yes, we also have experience deeply cultivating in the BSV ecosystem. Many developers in the BSV ecosystem, including us, have never left the Bitcoin circle, even though BSV and the Bitcoin mainnet are two different ecosystems; they are both based on UTXO. When new things and opportunities arise, based on an understanding of the UTXO ecosystem, we can enter faster and more keenly than others.
We have always kept an eye on all innovation opportunities in the UTXO structure. After BRC-20 came out, we saw everyone creating order-book type markets, but no one was doing swaps. In the Ethereum ecosystem, swaps have long been proven to be a very important infrastructure, achieving great development, so we began to tackle this.
BlockBeats: From BRC-20, ARC-20 to runes and then to CAT20, Dotswap has always kept up with new technological hotspots in the Bitcoin ecosystem. How does the team iterate?
Lin: We must thank our excellent team; they are a group of engineers who are very passionate about the UTXO model. This passion gives our team strong self-drive, making us strive for speed in every product update and help users save costs as much as possible.
Our team members have a rich understanding and knowledge of the tech stack, along with a pragmatic attitude. Basically, when we announce 'Coming Soon', new features go live within a week.
BlockBeats: There is an interesting saying that 'BSV developers are the backbone of the Bitcoin ecosystem'. What do you think of this statement?
Lin: I can't say we are the backbone; that would be an overstatement. I can only say that BSV developers have accumulated experience in the BSV ecosystem, which allows them to run faster than others. Although the advantages of BSV developers exist, as the elegance of the UTXO structure is discovered by more people, and more people are willing to invest effort into research, this advantage may quickly diminish.
In the current Bitcoin ecosystem, we can also see many developers from non-BSV backgrounds, such as OKX, and Magic Eden. I think they are the real backbone.
How do you view the present and future of Fractal and CAT20?
After the launch of Fractal and CAT20, Dotswap first quickly launched the CAT20 minting tool, followed by the launch of CAT20 swap. These two significant feature updates have attracted many new users and made Dotswap a crucial part of the Fractal ecosystem. So, what are Lin's views on the present and future of Fractal and CAT20?
BlockBeats: After CAT20, BRC-20, and runes were launched on Fractal, Fractal fell into a relatively quiet phase, and the price of $FB has been lukewarm. Many believe that Fractal has hit a bottleneck in innovation. What are your thoughts?
Lin: Fractal has only been online for a little over a month. In terms of attention, computing power, and on-chain transaction activity, its performance in such a short time has been very excellent, which I think has exceeded initial expectations. Furthermore, many developers are entering the Fractal ecosystem with their own resources to build, and a large amount of innovation will certainly emerge in the future; it just needs more time. These small teams without capital backing, especially those building applications on CAT20 and the entire CAT protocol, need time and tolerance.
But in fact, the CAT protocol has been progressing all along, and CAT721 is about to be released. The first project's gameplay requires locking a certain amount of tokens for a period to mint. This innovation achieved through contracts is completely unseen in BRC-20 or Runes on the mainnet.
People may judge the success of technological innovation by the short-term surge in coin prices, but the value of technological innovation may not necessarily be reflected through such short-term price increases. The only thing that can be certain is that the accumulation of quantitative changes in technological innovation will inevitably lead to qualitative changes over time. We cannot overestimate the short-term impact of technological innovation, nor can we underestimate its long-term effects.
BlockBeats: In the eyes of many players, CAT20 may still be just 'a new BRC-20/rune', and its narrative cannot compare to last year's BRC-20. How do you think CAT20 can change these players' perceptions?
Lin: I don't think we need to try to change anyone's perspective. If something is great from the moment it is born and everyone thinks so, it is indeed a 'heavenly start'. Then, who will each buyer sell their holdings to later? We really need to return to the construction of the protocol itself and strive to use advantageous technologies to create newer and more interesting applications to attract more mainstream users' attention. Under the guidance of good ecosystem projects, people will naturally accept and understand.
Everyone can have their own opinions, but I believe that protocols and applications that emerge from sufficient market competition will have strong attractiveness and advantages. The Bitcoin ecosystem must have these different viewpoints, or competition. In this competition, those who believe can get sufficient returns, and it will allow Bitcoin to continue to grow amidst competition.
But from my personal perspective, I believe CAT Protocol is a pioneering and entirely different thing, a smart contract system based on miners and a layer of consensus. The reason I don’t consider BRC-20 and others to be 'completely pioneering' is that similar practices have existed early on Omni, Counterparty, etc. The smart contract system based on miner verification, which is CAT, is able to preserve state within Bitcoin transactions, establishing a foundation for more interesting smart contract innovations.
However, at this stage, more infrastructure is still needed to make CAT more user-friendly. We have built a DEX for CAT20, and UniSat has also done so, with support for CAT20 just recently going live. The infrastructure needs some time to be refined before more subsequent development can occur.
BlockBeats: Some players believe that UniSat is not proactive enough in marketing Fractal; directly pumping $CAT to create a wealth effect is necessary for Fractal and CAT20 to break out. What do you think of this view?
Lin: Different groups have different expectations for CAT20. Some hope for the price of $CAT to rise; others hope that $CAT can reflect more value in the direct manifestation of price increase; some hope for the overall success of CAT Protocol.
If we set the goal of attracting more developers to make CAT and the Fractal ecosystem prosper with rich applications, then I think the current approach of UniSat to seriously support developers without overly creating high market expectations is very appropriate. The price increase that everyone wants to see will ultimately come with the richness and prosperity of ecosystem applications. I see $CAT as the embodiment and tokenization of the entire CAT Protocol brand.
BlockBeats: After the launch of Fractal and CAT20, there are voices saying that Dotswap is 'the biggest winner'. What are your thoughts? In what aspects will Dotswap and Fractal grow together?
Lin: We emphasize 'speed', just like 'First is first' on Ordinals, and the same goes for product development. Sometimes, our product experience may lag slightly behind some competitors due to 'speed', but we will catch up immediately. When something new like CAT20 comes out, users definitely need something usable first; we strive to meet their needs.
We are definitely inseparably linked with Fractal, complementing each other and growing together. Good applications will bring users to the ecosystem, and the prosperity of different types of applications within the ecosystem will benefit all types of applications. For example, CAT20 previously lacked wallet support, and we focused on swaps. Once UniSat filled this gap, everyone could directly merge UTXOs through wallets, eliminating the constraints of transaction sizes on our platform.
How do you view the present and future of the Bitcoin mainnet?
The revival of OP_CAT could be one of the biggest narratives in this round of the Bitcoin ecosystem, but will it really happen in this bull market? CEXs seem to lack enthusiasm for listing rune assets. Has the narrative of 'issuing coins on Bitcoin' reached its ceiling? If OP_CAT successfully revives, what huge changes will it bring to the Bitcoin ecosystem? Lin shared his views with us on these questions.
BlockBeats: From BRC-20 to runes, has the freshness of narrative value in Bitcoin asset issuance basically been mined out?
Lin: This perspective is quite interesting. Ethereum and Solana can also issue coins, and the cost of issuing coins is very low. Relying solely on issuing coins as a narrative of value has limited space. Launching a new protocol and then issuing coins for speculation has basically covered the player base after such a long time. If we want more newcomers to join, we definitely need a new narrative, as the consensus that can be gathered from simply issuing coins may have reached its limit.
CAT20 has added state, smart contracts, and programmability, which are significant innovations. However, how these innovations ultimately reflect on narratives that users are willing to pay for remains to be seen. We still need to think about what problems we can solve with these innovations and what benefits they can bring to users.
BlockBeats: Do you think that the narrative value of issuing coins has already been largely mined, and is this the reason why CEXs show a lack of interest in listing rune assets? Or is it because the trading of runes resembles NFTs more, and their market value before being listed on CEX has not undergone sufficient liquidity testing?
Lin: I cannot draw a conclusion because the considerations and interests of CEXs are not something I can understand, but I can offer some guesses on this issue.
CEXs have their own user base and must consider whether listing a new coin will generate more revenue. Furthermore, if I don’t list a new coin in a certain sector/concept, will my user base go to other CEXs? Judging from these perspectives, whether people think runes can catch CEXs' attention is subjective. Of course, besides these angles, CEXs may have other considerations, and it’s also possible that these are not the reasons for their lack of enthusiasm for runes. The answer is known only by the CEXs.
BlockBeats: Do you think OP_CAT can successfully revive in this bull market? One perspective is that the current discussions around OP_CAT's revival are far less than during the block size debate of the past. Perhaps we will only see signs of OP_CAT's revival when the community is deeply divided over this issue. What are your thoughts?
Lin: This view may be correct. We can only prepare for various possibilities rather than hope that OP_CAT will definitely revive at a certain point in the future.
Whether OP_CAT can be successfully revived is something we can ask those developers from Bitcoin Core: what conditions need to be met to alleviate your concerns and gain your support for reviving OP_CAT? If there is more direct communication like this, I think this issue would be easier to resolve. Even if their answer is 'world peace', it would be better than our current lack of clarity about their concerns.
BlockBeats: If CAT20 can achieve great success on Fractal, what impact will it have on the revival of OP_CAT on the mainnet?
Lin: I believe change starts from the demand side, absolutely not from the supply side. If OP_CAT can ultimately give rise to a large number of applications on Fractal, proving there is significant demand for various scenarios, the calls from the Bitcoin mainnet to meet these demands will also grow louder. In this case, Bitcoin will certainly need OP_CAT; otherwise, how will Bitcoin miners continue?
Otherwise, we can only listen to the 'Bitcoin authorities'. Whether Bitcoin needs something or not, it all depends on their opinion. The resurrection of OP_CAT is not really a technical issue, but rather a 'political topic'.
Moreover, if CAT20 can achieve such great success on Fractal, do we still need support from the mainnet? Or rather, does success itself prove the value independence of CAT20? The lack of support from the Bitcoin mainnet will not discount the value of CAT20 or even Fractal. Of course, if one day the Bitcoin mainnet really supports OP_CAT, that would be something we all wish to see.
BlockBeats: If OP_CAT is revived, what huge changes will occur in Bitcoin's narrative in this bull market? What potential massive opportunities will arise?
Lin: The revival of OP_CAT is just a small step because having OP_CAT alone is still not enough for many larger visions. However, if we have OP_CAT, trustless cross-chain bridges could potentially be realized, perhaps using zk Verify or other technologies; there will be many similar opportunities.
The future development of Dotswap
BlockBeats: Do you think Dotswap has the potential to become the Uniswap of Bitcoin? What is the product moat for Dotswap?
Lin: We certainly hope to become an important infrastructure of the Bitcoin ecosystem and reach a height similar to Uniswap. For this goal, we will always focus on our products and provide good services. We have also opened up our API hoping that more projects can connect with us and reach cooperation.
For us, we feel there is no so-called product moat, or rather, innovation is our moat. The only thing we can do is, once new opportunities arise, we can capture and act on them immediately, grasping every opportunity to create products that people like, continuously meeting the latest user demands, thus forming our reputation and brand.
BlockBeats: What other Bitcoin-centric innovations will Dotswap bring?
Lin: We are confident that we can quickly implement the use of the UTXO model, leveraging multiple inputs and outputs in UTXO transactions to achieve completely trustless swaps. This should be a level that no competitors can currently reach, and it is very valuable and meaningful for us.
BlockBeats: Dotswap currently has a platform token on runes; will it consider migrating to CAT20 or newer FT protocols in the future?
Lin: We will continue to observe the stability, development, and market response of these protocols. At this stage, constantly tampering with the platform token is not a good thing. The value of the platform token lies more in improving the product itself, helping these FT protocols and the entire ecosystem on Bitcoin to develop better, rather than depending on which protocol the platform token is on.
If the migration of the platform token can bring more benefits to our token holders, users, and even the product itself, we will definitely do it. But no one can predict the future; we can only say that we will always consider this issue from the perspective of token holders, users, and the product.
