The ALEX Bridge is a blockchain bridge that will connect USDT (Tether) on Ethereum with sUSDT on Stacks. Bridge is a wrapped bridge, with USDT wrapped by ALEX.
USDT has a marketcap of over $75B and ALEX Bridge serves to facilitate onboarding that liquidity onto the Stacks layers.
If you want to move tokens from one blockchain to another, you’ll need to use a blockchain bridge to transfer those assets.
Blockchain assets are often not compatible with one another — Stacks uses SIP-10 tokens and Ethereum uses ERC-20. To solve this incompatibility, blockchain bridges create synthetic derivatives that represent an asset from another blockchain.
So when a bridge is used to send USDT tokens from Ethereum to a Stacks wallet, that wallet will receive a token that has been “wrapped” by the bridge — converted to a token based on the target blockchain, in this case from USDT to sUSDT, which are pegged 1:1.
Bridges are either custodial (also known as centralized or trusted) or noncustodial (decentralized or trustless). The difference is in who controls the tokens that are used to create the bridged assets.
Bridge is custodial; USDT is wrapped into sUSDT by ALEX with a multisignature smart contract on Ethereum.
Bridge is bi-directional or “two-way” bridge, meaning you can freely transfer assets between Stacks and Ethereum and vice versa.
As with all crypto technology, risk is real whether using a centralized or decentralized bridge. Some of the more novel decentralized bridges are relatively untested and even those that have been tested are still subject to exploits.
Users provide both an Ethereum and Stacks layer wallet address. USDT is wrapped into sUSDT or sUSDT is unwrapped into USDT, with ALEX receiving a small transaction fee. The funds will be held by ALEX in a multi-sig wallet on Ethereum.
In launching the ALEX Bridge we are proceeding carefully and will take extensive security measures including:
The approvals for wrapping and unwrapping will be done by a set of validators, who monitor the transactions on each side of the chain and validate the transactions, which we are working with the Stacks ecosystem on.
With fine-tuning and careful testing, we are getting ready to bring a reliable and easy-to-use bridge to the Stacks layer.
The need to use centralized exchange (CEX) to onboard our ecosystem poses a major hurdle for new users. With the surge of interest in Bitcoin layers and the protocols, such as ALEX Bitcoin DeFi, built on those layers a Bridge
To streamline implementation of the ALEX Bridge, we will directly launch sUSDT (wrapped USDT on Ethereum).
The ALEX Bridge will initially link Ethereum USDT to sUSDT on ALEX, but additional tokens will be progressively added to it.
Linking Ethereum liquidity to ALEX is a major first step to bringing Bitcoin value to the multi chain and enabling the security of Bitcoin settlement for all crypto users.
With the depeg of USDC in March 2023, it’s essential our users have a choice of which hard pegged stablecoins to hold.
Tether is currently the 3rd largest cryptocurrency after Bitcoin and Ethereum with a marketcap of over 75B USD.
sUSDT will be wrapping ERC20-USDT (Tether) on Stacks.
xUSD will continue serving as a wrapped USDC provided by Tokensoft.
A xUSD/sUSDT stableswap pool is being considered for our AMM DEX.
On the future ALEX Orderbook both stablecoins will be accepted as collateral.
The ALEX Bridge Incentized testnet begins around April 1st and we expect to have our initial limited Mainet launch around 3 weeks later. Full access to the Mainnet is expected around the end of April.
Update: The ALEX Bridge is already Live.