The Layer 1 Foundation, in coordination with BRC20 lead maintainers UniSat and BestInSlot, are in the process of working towards integrating the “Swap Module” into the standard.

The BRC20 Swap Module is a system that enables the smooth and secure exchange of BRC20 tokens, leveraging the ordinals script system and the liquidity pool DEX design. It allows users to manage their token balances through defined operations, create and manage trading pairs, and add or remove liquidity.

We believe the implementation and standardization of swaps within BRC20 will substantially reduce friction for trading—and unlock untold liquidity as a step forward in building truly Bitcoin-native DeFi.

The team aims to have this upgrade completed within the next 6-8 weeks. Initially with a comment period of 4 weeks, followed by an implementation period where testnet hash comparison will be available.

Additionally, the Best in Slot team is working on a “programmability” module within BRC20—with the intention of creating a generalized complexity layer within the standard itself.

The programmability module in BRC-20 introduces the ability to inscribe smart contracts on to Bitcoin, allowing for complex computations and interactions with BRC-20 tokens.

This update will enable indexers to execute smart contract code, which permits users to designate specific contracts and functions for interaction, resulting in updates to the BRC-20 state as dictated by the logic of the contract. This enhancement could significantly increase the adaptability and functionality of BRC-20, opening up possibilities for diverse applications directly on Layer 1 Bitcoin.

We aim to have documentation and testing environments for programmability on BRC20 closer to Q3 2024, although the timeline on this is less clear than that for swaps.

Both of these efforts are highly experimental and true usability is still unproven. That said, we now see a path towards actualizing these efforts, and are excited to see what’s possible for Bitcoin-native DeFi.

Documentation related to the programmability layer is set to be released in May 2024. To read existing documentation or provide feedback about the upcoming Swap Module, please visit the Layer 1 Foundation forum. If you are a builder who wants to implement the swap module for an application, feel free to reach out to the Unisat team on Twitter for additional support.