The 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.
Alkimiya: Redefining transaction 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
Long and short position management
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 it 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 a predictable transaction fee experience for service providers and end users. At its core is a peer-to-peer market protocol that supports the creation, trading, and settlement of synthetic block space resources, such as BTC transaction fees and ETH baseFee. Through its SDK and frontend market, Alkimiya enables wallet providers, payment entities, bridge services, traders, and decentralized applications (dApps) to effectively manage their on-chain fees, optimizing the fee experience for end users.
Additionally, Alkimiya’s testnet is not only a significant technical milestone but also a test platform for community participation and innovation. All participants, whether node validators or miners, can engage with this platform by establishing trading positions and potentially turning these experiences into tangible economic returns once Alkimiya’s mainnet goes live.
With the continuous advancement and expansion of blockchain technology, Alkimiya’s efforts indicate that block space resource management will become more standardized and predictable, bringing greater stability and new growth opportunities to the entire cryptocurrency ecosystem. We welcome developers and blockchain enthusiasts from around the world to join us in exploring this exciting technological frontier.
Alkimiya is a frontend block space resource protocol aimed at providing a predictable transaction fee experience for service providers and end users. The protocol is based on a peer-to-peer market framework that supports the creation, 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 effectively manage their on-chain fees to optimize the fee experience for end users.
On public blockchains, the capacity of full-node resources is limited, and all on-chain activities must compete through transaction fees. Block space supply exhibits inelastic characteristics, while demand is short-term 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 full-node resources, instant pricing of these resource accesses remains a complex market challenge. Currently, most on-chain services and enterprises either absorb costs themselves or pass them entirely to users when facing high traffic, often leading to strong user backlash. To attract the next billion users, pricing and managing block space resources are crucial.
Alkimiya allows every on-chain movement to have a chain reaction on transaction fees. Previously, users and service providers were almost powerless against the drastic fluctuations in fees. Now, they can leverage this exposure through Alkimiya. Users can take long or short positions on specific block space resources (such as the average BTC transaction fee index within a specific period). Once these positions are entered, users will receive NFTs (ERC-1155) representing their positions in SilicaPool, drawing inspiration from the intricate complexity and spiritual depth of Tibetan sand mandalas. SilicaPool is the collection of all long and short positions within the same period, allowing users to 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.
The market operations are supported by two smart contracts: SilicaPools and SilicaIndex. SilicaPools are responsible for opening, settling, and trading these positions, while SilicaIndex acts 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, including earning money by leveraging the impact of 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 the TypeScript/JavaScript environment, allowing end users to easily integrate in nodejs or frontend environments.
Furthermore, the design of the Alkimiya protocol 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 uncertainties and complexities.
As the global economy increasingly shifts towards online operations, block space is becoming one of the most valuable resources of the new era. Like 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 the 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 of blockchain technology and user experience.
Alkimiya represents the next evolution in block space management and trading. By providing predictable and stable fee structures for service providers and users, 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 aimed at providing 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 implemented 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 for 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 calculations, serving as a crucial 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 during the Pool cycle, with the Pool tracking 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 creating limit orders, reflecting market supply and demand conditions and providing clear price indicators for trades. Additionally, each Silica Pool has a Cap (maximum price) to limit downside risks for long and short positions, ensuring fairness in transactions and market stability.
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 users entering short positions expect them to fall. Management of these positions is achieved through trading or holding NFTs, which can be burned at settlement to redeem the corresponding payment.
While Alkimiya provides a range of tools and mechanisms to optimize the trading experience and asset management, market volatility and smart contract risks remain 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 tools, Alkimiya offers detailed tutorials and guides, such as “How to Trade BTC Transaction Fees.” These resources aim to enhance users’ operational capabilities and market understanding, ensuring they can make wise investment decisions on the Alkimiya platform.
Through these features and resources, Alkimiya not only simplifies fee management but also provides new solutions for asset flow and risk management within the blockchain ecosystem. With the continuous development of technology and market expansion, these innovative features of Alkimiya are expected to have a profound impact on the entire blockchain industry.