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A Letter from Chiente Hsu
April 2, 2022

Dear Alexian,

It was almost a year ago when the idea for ALEX Bitcoin DeFi was first conceived.

I was on the phone with my co-founder Rachel discussing crypto, the growth of DeFi and how although technologically sophisticated, from a financial engineering perspective there was much to be desired in the space. Fundamentals such as a yield curve and fixed-term fixed-yield lend/borrow were missing, and no one was offering solutions to smooth out the wild volatility that scares many away from crypto.

Her baby boy Alex was just a year old and we imagined how as an adult what we call DeFi, would be just everyday finance for him. It was then we decided that rather than be passive spectators, we would be builders and ensure DeFi would grow up to be better than traditional finance where we had spent our careers. Our vision of the finance of the future would be one of inclusion; permissionless, decentralized and accessible to everyone. We would create an “Automated Liquidity Exchange” or ALEX.

In the beginning there were three people: myself, Rachel and Chan, the current CTO of ALEXgo. We considered Ethereum and relatively newer chains. But after speaking with Muneeb Ali, Co-founder of Blockstacks, it was clear to us the biggest opportunity in DeFi was to unleash the potential of almost $1T of Bitcoin capital.

We knew that in order to see mass adoption of DeFi, in the long run security and transparency would win. Stacks is uniquely suited to realize true Bitcoin DeFi as it is a blockchain tethered to Bitcoin through shared consensus. This means Stacks transactions settle and are visible into the Bitcoin state, and fully leverage the security of Bitcoin. In terms of transparency, Stacks is coded in Clarity, a “decidable language” which isn’t compiled into machine code, but rather broadcast to the blockchain just as it is written.

We joined the first cohort of the Stacks accelerator in May 2021, and began building, fundraising and attracting talent. We were fortunate through our careers to have met a number of brilliant quants who shared in our vision of bringing permissionless finance to Bitcoin.

Our first major milestone was the launch of our testnet on Oct 10, 2021. Needless to say my heart was in my throat. The reception was overwhelming, our community grew into the thousands within days. At the moment of launch only a dozen visitors at a time were able to test our platform during our first hour, though within a day it became hundreds. All told we had over 19K sign ups and participants, with over 110K transactions on our testnet.

Through our testnet contributors received distributions of tALEX (ALEX testnet token) for testing functionality. On Jan 3, 2022, we closed our testnet and tALEX were converted into IDO tickets. Given Bitcoin had entered a bear market we set our raise amount conservatively. By the time of the IDO lottery drawing itself, we were blown away to be 31 times oversubscribed.

I can’t say everything went off without a hitch, a combination of a high number of transactions (in the first 8 hours there was $4.5M in volume) as well as an upgrade to Stacks mining software on the same day of our launch, did result in significant network congestion issues. Every step of the way however, we are learning and improving.

As I write this article, ALEX has just finished launching the first NFT IDO on Stacks, the Bitcoin Monkeys project. The IDO was over 29x times oversubscribed. This time we designed a hybrid on-chain/off-chain lottery system that is fast, efficient and most importantly verifiable.

Once the lottery drawing began, within 8 stacks blocks, or about 2 hours, allocations and refunds were completed for over 14K tickets. Just an hour after that the $ALEX/$BANANA DEX was open. From an initial $50k pool liquidity, we have seen that grow to close to $200k in just three days.

Our mainnet also saw the launch of the ALEX Lab Foundation. To clarify, similar to how Hiro is the technology company that services Stacks but Stacks itself is governed by the non-profit Stacks Foundation, a parallel system exists with ALEX. ALEXgo is the technology company and the ALEX Lab Foundation, is a non-profit organization that governs the ALEX protocol along with the community of ALEX holders.

And where is ALEX now 10 weeks out from Mainnet? ALEX currently offers a DEX with deep liquidity and exciting staking and yield farming opportunities. TVL (total value locked) in ALEX is over $40M.

From our analytics page it’s evident that over 70% of $ALEX Stakers and Yield Farmers are staking for the max number of cycles, that is over 30 cycles (~100 days), which speaks to the loyalty and long term faith our community has in the project.

Our short-term roadmap includes:

  • The conclusion of the Bitcoin Monkey IDO on our launchpad. Also we are currently in discussions with several projects to IDO on ALEX. They are NFTs, DeFis, and Web2 companies looking to build Web3.
  • We are working to onboard wrapped USDC or XUSD to increase the financial inclusion of ALEX.
  • Our team is developing auto-ALEX, an auto-compounding token offering auto-harvesting and auto-staking. AutoAlex will be tradeable on our AMM pool and can be used as collateral in the future.

Looking toward the latter half of the year:

  • Our fixed-rate and fixed-term lend/borrow will be built on the Hyperchain mainnet for greater scalability. The Hyperchain is a subnet scalability solution to bring Lightning network-like speeds to Stacks.
  • Lend/borrow will be followed by order book dex, allowing limit market orders to be placed and enabling features such as NFT auctions.

We want ALEX to have the potential to enable and progressively onboard all crypto users interested in settling on the security of Bitcoin. We don’t see ourselves in competition for the same liquidity that’s already on Ethereum or Solana, but rather in competition with traditional finance itself.

We are playing the long game, with our eyes on a future where DeFi, TradFi or CeFi merge and there is only finance. We are building the financial infrastructure for the world that today’s children will inherit as adults.

A world where finance doesn’t have gatekeepers, middlemen or centralized authorities but rather is decentralized, permissionless and open to one and all. We believe in a future where in code we trust.

Thank you for being a part of this beginning of our journey and please don’t forget to follow our social channels, there will be many updates coming fast.


Chiente Hsu