Introduction

1.1 Background and Context

Decentralized trading has emerged as a transformative force in the world of finance, offering individuals greater control, transparency, and autonomy over their digital assets. At the forefront of this revolution stands DexOrdi, a pioneering platform that has redefined decentralized trading on the Bitcoin network. DexOrdi combines advanced technology, the BRC-20 and CBRC-20 standard, and a vision for the future to unlock new possibilities in the decentralized finance (DeFi) landscape. BRC-20 and CBRC-20 is an experimental token standard that facilitates the creation and transfer of fungible tokens on the Bitcoin blockchain through the Ordinals protocol. Inspired by Ethereum's token standards, BRC-20 and CBRC-20 tokens offer unique mechanisms and functions. Although they gained considerable popularity in the first half of 2023, it's important to note that BRC-20 and CBRC-20 tokens are still in the experimental phase, requiring users to exercise utmost caution.

BRC-20 and CBRC-20 tokens are compatible with other Bitcoin-based assets and can be directly traded with Bitcoin on DexOrdi and vice versa. Additionally, these tokens inherit the security features of the Bitcoin network, including protection against double-spending or the 51% network attack. The creation of BRC-20 tokens stemmed from the introduction of NFTs on Bitcoin's protocol in January 2023, which prompted the exploration of fungible tokens on the network. In March 2023, a pseudonymous programmer named Domo established the BRC-20 and CBRC-20 token standards, enabling the minting of fungible tokens on Bitcoin. The first deployed BRC-20 token was named "ordi," and Bitcoin wallets swiftly integrated support for BRC-20 and CBRC-20 tokens. Subsequently, numerous other BRC20 and CBRC-20 tokens were launched, some of which experienced significant market capitalization and price surges by May 2023. The demand for BRC-20 and CBRC-20 tokens contributed to a surge in Bitcoin transaction fees and notable congestion on the Bitcoin network.

It's crucial to acknowledge that the BRC-20 and CBRC-20 token standard is experimental, and as such, uncertainties and risks are inherent. Users should exercise caution and conduct thorough research before engaging with BRC-20 and CBRC-20tokens due to their limited utility and the dynamic nature of their future prospects.

Understanding the functioning of Bitcoin Ordinals is essential to gain insights into BRC-20 and CBRC-20 tokens. The Ordinals protocol is a systematic approach for numbering satoshis, enabling users to attach additional data through a process known as "inscription."

BRC-20 and CBRC-20 tokens leverage Ordinals inscriptions using JSON (JavaScript Object Notation) data to deploy token contracts, mint new tokens, and facilitate their transfer. Presently, the BRC-20 token standard supports functions such as token deployment, minting specific quantities, and transferring tokens between parties.

However, it's important to note that the BRC-20 and CBRC-20 token standard is relatively new, and the process of deploying, minting, and transferring tokens may not be user-friendly. Furthermore, there is a limited availability of tools and supporting services for BRC-20 tokens at present.

Significant distinctions exist between BRC-20 and ERC-20 tokens despite the similarity in their names. BRC-20 tokens operate within the Bitcoin network, while ERC-20 is a well-established standard within the Ethereum network. Unlike ERC-20 tokens, BRC-20 and CBRC-20 tokens do not utilize and consequently offer less functionality. Conversely, ERC-20 tokens have the capability to interact with various protocols and applications, enabling a wide array of services, including borrowing and lending.

ERC-20 stands as a well-established token standard with a wide array of tokens already in existence and extensively utilized. Originating in 2015 and officially recognized in 2017, ERC-20 tokens have undergone rigorous testing and demonstrated stable functionality. In contrast, the future of BRC-20 and CBRC-20 tokens carries a significant level of uncertainty.

Risks Associated with BRC-20 and CBRC-20 Tokens

The BRC-20 and CBRC-20 token standard currently represents an experimental endeavour by developers aiming to enhance fungibility on the Bitcoin blockchain. As this standard is still undergoing testing, various challenges may arise.

Despite the considerable attention surrounding BRC-20 and CBRC-20 tokens, their practical utility remains limited. Moreover, their long-term prospects remain dubious. Given the ease of minting BRC-20 tokens and CBRC-20, there is a possibility that a significant portion could ultimately hold little to no value. Users and investors should exercise caution, conduct thorough research, and make informed decisions before engaging with this novel token type.

1.2 Research Objectives

The primary objective of this study is to examine the role of DexOrdi in revolutionizing decentralized trading on the Bitcoin network. By exploring its features, functionalities, and impact, this paper aims to shed light on the transformative power of DexOrdi and its potential to shape the future of financial transactions

1.3 Research Questions

This study seeks to address the following research questions:

How does DexOrdi leverage advanced technology and the BRC-20 and CBRC-20 standard to enable decentralized trading on the Bitcoin network?

What are the key features and functionalities offered by DexOrdi that differentiate it from other platforms?

What is the impact of DexOrdi on decentralized finance, including efficiency, liquidity provision, user accessibility, and market dynamics?

How does DexOrdi contribute to the evolution of financial systems and its potential to reshape traditional finance?

1.4 Significance of the Study

Understanding the role of DexOrdi in revolutionizing decentralized trading is crucial for stakeholders, investors, and enthusiasts in the DeFi space. This study will provide valuable insights into the advancements brought forth by DexOrdi, its impact on the Bitcoin network, and the broader implications for decentralized finance. The findings of this research will contribute to the existing body of knowledge and inform discussions surrounding the future of decentralized trading.

1.5 Methodology

To accomplish the research objectives, this study will employ a combination of qualitative and quantitative research methods. Primary data will be gathered through interviews with DexOrdi team members, industry experts, and community members. Secondary data will be collected from academic literature, industry reports, and online resources. The analysis will involve a comprehensive examination of DexOrdi's features, case studies, and real-world applications. The findings will be presented in a clear and concise manner, providing an in-depth understanding of DexOrdi's pioneering role in revolutionizing decentralized trading on the Bitcoin network.

By exploring the innovative features, impact, and potential of DexOrdi, this study aims to contribute to the knowledge and understanding of decentralized finance and its implications for the future of financial systems.