AlkimiyaAlkimiya: Infrastructure for Synthetic Blockspace
“From this, he inferred a profound principle: that the whole of nature was greater than the sum of its parts, each component interacting with others in complex ways to sustain the balance and harmony of the whole.” – Ibn Tufayl, Hayy ibn Yaqzan Overview Alkimiya is a pioneering blockspace resource protocol that serves as the backbone for powering predictable transaction fee experiences across service providers and end users. At its core, Alkimiya is a peer-to-peer markets protocol that enable...
AlkimiyaEthereum Blockspace: Who Gets What and Why
“Market that can operate freely is like a wheel that can turn freely: it needs an axle and well-oiled bearings. How to provide that axle and keep those bearings well oiled is what market design is about.”― Alvin E. Roth, Who Gets What — and Why: The New Economics of Matchmaking and Market DesignOutlineOverview of the blockspace marketThe supply side: the structure of Ethereum miningThe supply side: the Ethereum mining cyclesThe demand side: the time value of blockspaceThe demand side: congest...
AlkimiyaConsensus Capital Markets
“He who controls the spice controls the universe.” - Frank Herbert, Dune Saneel Sreeni Leo ZhangIntroduction:Commodities are basic raw materials that serve as the basis for the production of everyday goods and services. The history of commodities is a reflection of civilization itself. Humans waged wars against each other to seek control over the most important resources; from rice, to metals, to spices, to oil. As more aspects of the global economy and daily activities migrate to the cryptoe...
Alkimiya is a decentralized blockspace markets protocol.
AlkimiyaAlkimiya: Infrastructure for Synthetic Blockspace
“From this, he inferred a profound principle: that the whole of nature was greater than the sum of its parts, each component interacting with others in complex ways to sustain the balance and harmony of the whole.” – Ibn Tufayl, Hayy ibn Yaqzan Overview Alkimiya is a pioneering blockspace resource protocol that serves as the backbone for powering predictable transaction fee experiences across service providers and end users. At its core, Alkimiya is a peer-to-peer markets protocol that enable...
AlkimiyaEthereum Blockspace: Who Gets What and Why
“Market that can operate freely is like a wheel that can turn freely: it needs an axle and well-oiled bearings. How to provide that axle and keep those bearings well oiled is what market design is about.”― Alvin E. Roth, Who Gets What — and Why: The New Economics of Matchmaking and Market DesignOutlineOverview of the blockspace marketThe supply side: the structure of Ethereum miningThe supply side: the Ethereum mining cyclesThe demand side: the time value of blockspaceThe demand side: congest...
AlkimiyaConsensus Capital Markets
“He who controls the spice controls the universe.” - Frank Herbert, Dune Saneel Sreeni Leo ZhangIntroduction:Commodities are basic raw materials that serve as the basis for the production of everyday goods and services. The history of commodities is a reflection of civilization itself. Humans waged wars against each other to seek control over the most important resources; from rice, to metals, to spices, to oil. As more aspects of the global economy and daily activities migrate to the cryptoe...
Alkimiya is a decentralized blockspace markets protocol.
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“Memory can change the shape of a room; it can change the color of a car. And memories can be distorted. They're just an interpretation, they're not a record, and they're irrelevant if you have the facts.”
— Christopher Nolan, Memento
Special thanks to @howry_ for the insights and inspiration leading to this content.
On 31st October 2024, the mint of Rune MEMENTO•MORI caused a significant spike in BTC transaction fees.
The Rune was etched a week before on 22nd October by Casey Rodarmor, the inventor of Ordinals theory and creator of Runes. At a maximum supply of 100M, 50% of it was pre-mined and airdropped to Hell Money Pod’s - Rodarmor’s Bitcoin podcast - Patreon subscribers, while the remaining 50% was distributed through a public mint.
In the week leading up to the mint, the word was spread throughout the Rune community and beyond, which caused significant competition amongst minters. As a result, Bitcoin transaction feerates skyrocketed by 140 times, jumping from approximately 5 sats/vB to 700 sats/vB within a single block.
2 days before the public mint, Alkimiya announced BTC•FEES•GASTOKEN – a special, one-time Rune that gives minters something no other collection does: an offset on their BTC transaction fees.
https://x.com/alkimiya_io/status/1851264706830590290
BTC•FEES•GASTOKEN tracks the average BTC feerate over a period of time. When feerate spikes, the value of these Runes follows, partially offsetting the exorbitant MEMENTO•MORI mint cost. At the end of the pool, the minters can redeem BTC•FEES•GASTOKEN for sats equal to actual average transaction fees.
Before delving deeper into the mechanics, it's essential to understand the following:
Value of Satoshis (Sats) relative to BTC
Transaction size units (virtual Bytes, or vB)
(Transaction) Fee Rate (Sats/vB)
Median Fee Rate (Sats/vB)
Runes typically have a 3-stage timeline:
Etching: Initialization of rules of Runes details (think of it as an NFT contract creation)
Premine: Deterministically minting a fixed supply for permissioned distribution
Mint: The public bidding phase to own the tokens
The public mint lasted ~10 blocks, subjected to Bitcoin's Priority Gas Auction (PGA). This created a race between the first successful miner versus real-time mempool bidding, often leading to a difference between expected and actual blocks.
With reference to the first block of the mint, there is a huge -25.53% deviation in expected versus actual total fees.
The post-block fee rate were:
Expected: ~900 Sats/vB
Actual: ~700 Sats/vB
As time passed, the PGA intensified (higher bids), but miners had already been building prior to the latest bids, hence the lower actual feerate.
Not surprisingly, blocks that are produced unusually faster than average generation time (~10mins) have significantly lower total fees than the previous one. This corroborates with how the PGA works where lower bids are usually placed at the 'start' & increase towards the end.
Now, price action.
50% of premine supply were distributed before the public mint, which resulted in 2 market activities during the mint:
Magic Eden secondary market activity
First-hand minting
Prior to mint, secondary sale pressure bottomed at ~$8M MCAP before surging back.
This PA felt like any NFT launch with an initial distribution with an ongoing public mint. However, the underlying cost for first-hand minting was WAY BELOW the secondary sale price on Magic Eden throughout the 10 blocks. This gap creates a clear profit opportunity for the minters.
Beyond base profitability, some minters’ profits are further enhanced by Alkimiya’s BTC•FEES•GASTOKEN.
BTC•FEES•GASTOKEN is exclusive to MEMENTO•MORI minters. For every 1000 of MEMENTO•MORI minted, one could claim 200 BTC•FEES•GASTOKEN. Since this is a limited one-time collection with a total supply of 2mm, the claim was on a first-come, first serve basis.
Each BTC•FEES•GASTOKEN is backed by LONG feerate positions on Alkimiya, which is equivalent to rewarding MEMENTO.MORI minters with 400vB LONG on median feerate per lot (1000 tokens). After Nov 3rd, BTC•FEES•GASTOKEN holders were able to redeem them for sats (wBTC) equal to the amount of tx fees the positions are tracking.
A total of 3464 addresses submitted their claims – and 58 of those addresses received 0.04 wBTC altogether.
This implies a partial mint cost off-set for:
6.15 BTC for 5-25 Sat/vB Pool
0.027 BTC for 25-45 Sat/vB Pool
totaling to 6.18 BTC of settlement at a (median) fee rate of 11.813 Sats/vB.
For 1 lot Mint:
The 58 verified addresses received (11.813-5) x 400 = 2725 Sats as rebate.
Circling back to the 2021 NFT craze, we'd seen countless instant profitable mints that led to (a bit too) insane price discovery. Bitcoin Runes was only introduced <6 months ago, with the majority lack in understanding. Bitcoin math isn't rocket science, and the 'barriers to entry' is simply putting effort into learning. With blockspace market platform Alkimiya, advanced strategies can be employed to speculate & hedge against major events/activity.
“Memory can change the shape of a room; it can change the color of a car. And memories can be distorted. They're just an interpretation, they're not a record, and they're irrelevant if you have the facts.”
— Christopher Nolan, Memento
Special thanks to @howry_ for the insights and inspiration leading to this content.
On 31st October 2024, the mint of Rune MEMENTO•MORI caused a significant spike in BTC transaction fees.
The Rune was etched a week before on 22nd October by Casey Rodarmor, the inventor of Ordinals theory and creator of Runes. At a maximum supply of 100M, 50% of it was pre-mined and airdropped to Hell Money Pod’s - Rodarmor’s Bitcoin podcast - Patreon subscribers, while the remaining 50% was distributed through a public mint.
In the week leading up to the mint, the word was spread throughout the Rune community and beyond, which caused significant competition amongst minters. As a result, Bitcoin transaction feerates skyrocketed by 140 times, jumping from approximately 5 sats/vB to 700 sats/vB within a single block.
2 days before the public mint, Alkimiya announced BTC•FEES•GASTOKEN – a special, one-time Rune that gives minters something no other collection does: an offset on their BTC transaction fees.
https://x.com/alkimiya_io/status/1851264706830590290
BTC•FEES•GASTOKEN tracks the average BTC feerate over a period of time. When feerate spikes, the value of these Runes follows, partially offsetting the exorbitant MEMENTO•MORI mint cost. At the end of the pool, the minters can redeem BTC•FEES•GASTOKEN for sats equal to actual average transaction fees.
Before delving deeper into the mechanics, it's essential to understand the following:
Value of Satoshis (Sats) relative to BTC
Transaction size units (virtual Bytes, or vB)
(Transaction) Fee Rate (Sats/vB)
Median Fee Rate (Sats/vB)
Runes typically have a 3-stage timeline:
Etching: Initialization of rules of Runes details (think of it as an NFT contract creation)
Premine: Deterministically minting a fixed supply for permissioned distribution
Mint: The public bidding phase to own the tokens
The public mint lasted ~10 blocks, subjected to Bitcoin's Priority Gas Auction (PGA). This created a race between the first successful miner versus real-time mempool bidding, often leading to a difference between expected and actual blocks.
With reference to the first block of the mint, there is a huge -25.53% deviation in expected versus actual total fees.
The post-block fee rate were:
Expected: ~900 Sats/vB
Actual: ~700 Sats/vB
As time passed, the PGA intensified (higher bids), but miners had already been building prior to the latest bids, hence the lower actual feerate.
Not surprisingly, blocks that are produced unusually faster than average generation time (~10mins) have significantly lower total fees than the previous one. This corroborates with how the PGA works where lower bids are usually placed at the 'start' & increase towards the end.
Now, price action.
50% of premine supply were distributed before the public mint, which resulted in 2 market activities during the mint:
Magic Eden secondary market activity
First-hand minting
Prior to mint, secondary sale pressure bottomed at ~$8M MCAP before surging back.
This PA felt like any NFT launch with an initial distribution with an ongoing public mint. However, the underlying cost for first-hand minting was WAY BELOW the secondary sale price on Magic Eden throughout the 10 blocks. This gap creates a clear profit opportunity for the minters.
Beyond base profitability, some minters’ profits are further enhanced by Alkimiya’s BTC•FEES•GASTOKEN.
BTC•FEES•GASTOKEN is exclusive to MEMENTO•MORI minters. For every 1000 of MEMENTO•MORI minted, one could claim 200 BTC•FEES•GASTOKEN. Since this is a limited one-time collection with a total supply of 2mm, the claim was on a first-come, first serve basis.
Each BTC•FEES•GASTOKEN is backed by LONG feerate positions on Alkimiya, which is equivalent to rewarding MEMENTO.MORI minters with 400vB LONG on median feerate per lot (1000 tokens). After Nov 3rd, BTC•FEES•GASTOKEN holders were able to redeem them for sats (wBTC) equal to the amount of tx fees the positions are tracking.
A total of 3464 addresses submitted their claims – and 58 of those addresses received 0.04 wBTC altogether.
This implies a partial mint cost off-set for:
6.15 BTC for 5-25 Sat/vB Pool
0.027 BTC for 25-45 Sat/vB Pool
totaling to 6.18 BTC of settlement at a (median) fee rate of 11.813 Sats/vB.
For 1 lot Mint:
The 58 verified addresses received (11.813-5) x 400 = 2725 Sats as rebate.
Circling back to the 2021 NFT craze, we'd seen countless instant profitable mints that led to (a bit too) insane price discovery. Bitcoin Runes was only introduced <6 months ago, with the majority lack in understanding. Bitcoin math isn't rocket science, and the 'barriers to entry' is simply putting effort into learning. With blockspace market platform Alkimiya, advanced strategies can be employed to speculate & hedge against major events/activity.
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