# _An On-Chain Interview With the Founder and CEO of UniSat_
### A conversation about the potential of BRC-20, UniSat's meteoric rise, network congestion, and the future of Bitcoin.
###### By Leonidas | June 27, 2023
**Hi Lorenzo. You are the founder and CEO of UniSat correct?**
Yes. I have been actively involved in the crypto space since 2018, particularly in Bitcoin-related development and research. UniSat was initially formed by a small team of developers well-versed in Bitcoin technologies such as SegWit, Lightning Network, and TapRoot.
Our team primarily consists of developers who take a rapid and pragmatic approach, continuously exploring novel ideas, conducting experiments, and developing prototypes. This heuristic mindset allows us to iterate swiftly and deliver innovative solutions to our growing audience.
Additionally, we have made a conscious decision to maintain a focused and compact organizational structure in the foreseeable future, allowing us to concentrate our efforts and deliver exceptional value to our audience.
**When did you first hear about Bitcoin and what attracted you to it so much that you would go on to build a company on top of it?**
Bitcoin has had a profound impact on both the world and my personal journey. Back in 2015, I wrote an in-depth article outlining how Bitcoin would revolutionize the gaming industry. It was during that exploration that I conceived the idea of a decentralized, continuous virtual open world built on the foundation of Bitcoin, utilizing blockchain + magnet + Git as a combination. Over the course of eight years, I have gradually and steadily developed a relatively strong confidence that blockchain tech holds potential to make it virtually realized when combined with various technologies.
In comparison to other modern blockchains, bitcoin is plain and simple as described in the whitepaper. While the crypto industry has witnessed the emergence of complex solutions and innovative concepts surrounding blockchain technology, Bitcoin's implementation has remained straightforward, like the C programming language in computer science, preserving the inner strength and elegance with immense untapped value waiting to be discovered and harnessed.
In 2023, the introduction of Ordinals and the BRC-20 standard has opened up new possibilities for Bitcoin, and we are witnessing more exciting developments on the horizon.
**When all of the other devs in the Ordinals space dismissed Domo’s initial thread proposing the BRC-20 standard as a ridiculous idea, you didn’t see it that way. You saw the potential in BRC-20. What did you see that everyone else was missing?**
BRC-20 is far from being a mere copy of ERC-20. It has proven to be a compelling innovation in its own right.
What caught our attention was its ability to demonstrate how simple it can be that a command-based system could be effectively implemented on top of inscriptions, operating independently above the underlying UTXO hierarchy graph within the Bitcoin blockchain boundary.
By "floating" above the execution layer, BRC-20 achieves a remarkable level of simplicity and flexibility, albeit at the cost of sacrificing the deterministic advantages offered by the UTXO hierarchy graph, such as coherence and consistency.
This simplicity holds significant value for both Domo and UniSat. Moreover, the true potential of BRC-20's flexibility is yet to be fully unveiled, and we anticipate that it will gradually unfold in the near future, bringing further benefits and possibilities to the table.
**UniSat was an overnight success. In the first two weeks of launching you guys did over $25M in volume and sparked so much excitement for minting BRC-20 tokens that Bitcoin saw a spike in fees from an average of $2 to over $30. How did it feel living through that moment and knowing that something you built had caught the attention of the entire crypto space?**
Frankly we were not prepared for the surge in demand.
During that period, every stage of the process was heavily congested. The rapid influx of inscriptions into the mempool posed significant challenges in getting them included in blocks. Our nodes experienced consistent rejection from the main network due to the high volume of traffic and configuration issues. As a result, backlogged orders accumulated with highly batched inscribing transactions, overwhelming our capacity to process them. Furthermore, our enthusiastic users generated a substantial volume of requests, adding further strain to the system.
Most components of the infrastructure were overwhelmed by the intensity of the situation. This highlighted the fragility of the entire system and emphasized the need for comprehensive solutions. We learned this lesson the hard way and realized that addressing the challenges extends beyond resolving issues within UniSat's infrastructure. It also necessitates addressing the capacity limitations of the entire network. We recognize the importance of finding a sustainable approach to ensure a prosperous future for the entire system.
**It is public knowledge that UniSat has been collaborating behind the scenes with several centralized exchanges, such as OKX, to improve the infrastructure behind the BRC-20 protocol. What role do you see CEXs playing in the BRC-20 ecosystem and how do you see them coexisting with DEXs like UniSat?**
It's generally good for them to bring a larger audience into the game. CEXs are welcomed by UniSat and we have been helping on this with our APIs/docs in May and June. Frankly we don't see them as any kinds of opponents. It's not about being polite or hypocritical. The underlying rationale is quite straightforward.
UniSat operates in the realm of constant innovation and experimentation within the Bitcoin space. We often find ourselves venturing into uncharted territories, tackling open and complex problems. These challenges are seldom taken on by larger players like CEXs, as they prefer a more risk-averse approach of waiting for verification and making bets. UniSat, on the other hand, engages in an exploratory game, seeking out communities and tribes before concepts become fully verified, as we experienced with the introduction of BRC-20.
By charting our own course and exploring unverified territories, we are able to pioneer new ideas and technologies that may not be immediately embraced by established players. This unique approach allows us to uncover opportunities and push boundaries in the crypto industry.
**The biggest critique I hear about UniSat is that you guys have been so successful with your BRC-20 indexer and DEX that UniSat presents a centralization risk for the BRC-20 protocol. What would you say to the people who are raising this concern?**
Our indexer is open-sourced and now we have on-chain indexers provided by Alex. These development activities bring about decentralized implementations for public witness, as well as proprietary implementations optimized for enhanced performance and responsiveness. Both approaches hold value and are expected to coexist in the foreseeable future.
Our goal is to make the indexer service easily accessible to everyone with a simple 'one-click' setup. By empowering individuals to run their own indexers, we aim to mitigate concerns around centralization risk. We believe that this decentralized approach will contribute to a more robust and resilient ecosystem.
In the realm of exploration, new continents are often discovered by individual explorers. We value "being criticized as centralized" a key benchmark that if we are working on right things and being adopted by the massive. And we are truly enthusiastic about addressing next challenge causing 'centralization risk' :).
**What is the most pressing problem facing the BRC-20 protocol today and what do you think should be done to address it?**
BRC-20, as a protocol, offers a solid foundation for developers to build upon, thanks to its simplicity and stability. We highly value the efforts made by Domo to preserve and maintain this simplicity.
Having that said, it has become increasingly important to introduce an effective and flexible approach to extend the protocol without producing unnecessary complexities. This urgency stems from the diverse needs and use cases that people are exploring with BRC-20.
We are actively engaged in discussions with relevant individuals to address the design and implementation aspects of enhancing the protocol's extensibility and versatility. While we are still in the process of refining these ideas, we anticipate being able to share more details in the upcoming weeks, once the practical maturity of these concepts has been reached.
**Are there any exciting initiatives that UniSat has been working on that you can share and what excites you the most about what is coming up for BRC-20 in the short term?**
In the upcoming weeks, we are going to deliver features that support recursive inscription collections, alongside product-level improvements such as Trustless Auction and the development of a mobile app. These additions, while significant, are just part of our ongoing efforts.
There are something really exciting (generally I tend to be conservative about this but yeah it's exciting) we are experimenting with. It's about dealing with the congestion problem of the bitcoin main network I mentioned above.
This congestion issue is a significant concern for us. Last time it congested, people could be thinking "okay, they don't expect that happen that soon, they are not prepared for it". but within a couple of months, with the emergence of interesting applications, the main network could be congested again.
If this were to happen, it could lead to doubts about the scalability of Ordinals on Bitcoin, and people may begin to lose confidence in the system's ability to handle existing volume, let alone accommodate future growth. We are fully aware of this potential scenario, and addressing the congestion problem has become UniSat's primary priority.
This is likely to happen if we do nothing. It's the elephant in the room that everyone see it for years but pretend to not seeing it. In the coming weeks, we will be revealing more details about our efforts to tackle this challenge. We are committed to finding a sustainable and scalable solution to the congestion problem, ensuring the long-term viability and confidence in the entire system.
**What is your vision for UniSat? Where would you like UniSat and BRC-20 to be in ten years?**
Bitcoin's impact on fintech has undoubtedly been significant. However, as time has passed, other blockchains have emerged, showcasing strong capabilities in various areas. This has led to the narrowing of Bitcoin's narrative, primarily revolving around its role as 'Digital Gold' and 'Crypto Reserve'. Unfortunately, the potential of Bitcoin as a technology to serve billions of people has been somewhat overlooked due to concerns related to its performance, programmability, and scalability. Additionally, the fixed block rewards for miners have remained the main source of profit for years, which have been expected to be changed to a service-fee driven model since 2009.
Fortunately, the introduction of Ordinals, including protocols like brc-20 and others built around it, has opened up new possibilities. These protocols allow external value to be injected into Bitcoin, potentially enabling miners to generate more revenue than what can be obtained through fixed block rewards. This presents an opportunity for Bitcoin to undergo a paradigm shift, ultimately establishing itself as a sustainable chain with a healthier incentive model.
On top of this, brc-20 represents an extraordinary (no pun intended :p) experiment. The nature of 'floating' allows for a more flexible and loosely bound connection to the underlying physical structure. This feature opens up the potential for a different evolutionary path.
To understand why it matters, we can examine the evolution of the Lightning Network (LN) over the years. LN was initially designed to be tightly integrated with the implementation of Bitcoin transactions, which resulted in significant limitations on its application. It's over-complicated (for user to understand and use) and over-rigid (for dev to extend). Typical users who are not well-versed in concepts like open-close channels, inbound-outbound capacities, and transaction routing tend to opt for managed solutions, resulting in a limited adoption of LN for everyday transactions. Instead of becoming a 'micro-payment network' as initially envisioned, LN has primarily served as a 'settlement network' between merchants and wallet providers, being unsuccessful to achieve widespread adoption.
New experiments like Ordinals and brc-20 have learned from these challenges and are leading us towards an exciting exploration path that emphasizes simplicity. They provide an opportunity for Bitcoin to grow into an organic system with its original chain as the backbone.
UniSat, as a dedicated development team, is committed to assisting Bitcoin in its growth. Our aim is to transform Bitcoin from a single blockchain with numerous incompatible protocols scattered in the wild into an organic and versatile system. We prioritize compatibility, composability, parallelism, and scalability, setting the stage for Bitcoin's evolution in the years to come.