On April 1st, the Motoswap team announced the launch of what it describes as the “first native base layer decentralized exchange (DEX)” on Bitcoin mainnet.
According to the Motoswap team, users can: swap There are no bridges or assets involved, and you can stake and generate income while Bitcoin (BTC) remains on the base layer (exchanges). (wrapped assets).
However, this does not mean that decentralized finance (DeFi) operations take place within Bitcoin. in fact, Bitcoin acts as a payment layer This records funds and the trading, staking, and return logic is performed in an additional layer.
Motoswap is an application that runs on OP_NET, a protocol that allows smart contracts to be executed deterministically on Bitcoin using standard network transactions.
Unlike second layer solutions such as the Lightning Network (LN), OP_NET does not create a separate chain or have its own consensus. Everything is recorded in Bitcoin blocksas already explained by CriptoNoticias.
However, the conclusion of the contract is subject to the following conditions: Depends on network nodes running OP_NET softwarean additional layer not natively included in Bitcoin. The contract logic is processed in the protocol’s own execution environment, OP_VM, and only its results are recorded on the Bitcoin main chain.
What can you do with Motoswap and what role does Bitcoin play?
According to Motoswap’s official documentation, users can perform four operations on the platform. The core operations of the platform are Exchange between BTC and OP-20 tokens Use the NativeSwap tool. This allows you to buy OP-20 tokens with native BTC from your OP_NET wallet or sell your OP-20 tokens to receive native BTC without an intermediary.
The Motoswap interface includes: slippery, Default is set to 40%which represents the maximum allowed difference between the quoted price and the actual execution price. This high value reflects that the liquidity of the early stage ecosystem is still limited.
Besides the exchange, the platform also offers other features such as providing liquidity, staking MOTO tokens, and yield generation. However, these operations These are not part of Bitcoin’s native featuresBut it runs on OP_NET, which is built on top of Bitcoin.
In this context, users can provide liquidity by depositing pairs of tokens into a pool, which can be easily exchanged in exchange for a portion of the tokens. 0.3% is charged by the platform for each operation. these pool These do not exist as contracts within Bitcoin, but as structures managed by the OP_NET system itself.
On the other hand, staking Motoswap native MOTO tokens allows users to lock this asset and receive the remaining 0.2% of the commissions generated by the tokens. swap. This distribution is not a mechanism specific to the Bitcoin network, but rather responds to the internal rules of the protocol.
lastly, yield agricultureUsers can earn additional rewards by depositing LP tokens (certificates representing participation in a liquidity pool) into specific contracts. As in the previous case, this logic is executed outside of Bitcoin.
Overall, Bitcoin complies with this scheme Role of payment layer– Record and secure your transactions. Meanwhile, exchange logic, liquidity provision, and incentive distribution are developed in upper layers that extend its functionality.
Possible risks when using Motoswap
Finally, the Motoswap app documentation also warns: Three specific risks for users:
- Companies providing liquidity will be exposed to permanent losses. If the price of the token changes while you are depositing funds, the value you withdraw may be less than the value you deposited.
- Those selling tokens should note that once they join a seller’s queue, there is no cancellation function.
- The documentation points out that smart contracts are subject to errors and unexpected behavior that can lead to losses.
In this way, while taking into account the risks listed in the table, Motoswap seeks to establish itself as a DeFi platform that can operate on Bitcoin’s base layer, within an ecosystem whose usage rules and user base are still being defined.
