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Cryptocurrency News Articles
Bitcoin Startup Satflow Targets 'Mempool Sniping' in New Token-Trading Rival to Magic Eden
Oct 23, 2024 at 10:00 pm
The project, which recently raised $7.5 million, says the new decentralized exchange (DEX) will target the market for Bitcoin-based tokens including Ordinals NFTs
Bitcoin infrastructure firm Satflow has launched a decentralized exchange (DEX) for professional traders, targeting the market for Bitcoin-based tokens including Ordinals NFTs and Runes fungible tokens.
The project, which recently raised $7.5 million, says the new DEX will aim to curb unsavory transactional practices that are possible due to the blockchain's long block times.
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Its fees will initially be 0%, a couple percentage points lower than NFT marketplace Magic Eden's, according to a press release shared with CoinDesk.
The DEX will attempt to eliminate the practice of mempool sniping, where users exploit the time lag in which a transaction is waiting to be added to a Bitcoin block.
Under the blockchain's design, the "mempool" is the queue where transactions sit waiting to be included in new blocks by Bitcoin miners.
Snipers essentially hijack these transactions by removing them from the waiting room, then add them back in with their own signature and a higher fee attached, so that the transactions get chosen by Bitcoin miners first for inclusion in the next block.
There is a greater opportunity for this practice on Bitcoin than other blockchains due to the 10-minute window before a transaction is added to a new block and thus confirmed. The issue is further exacerbated in the Ordinals and Runes ecosystems, where new assets may be prone to rapid price swings.
To this end, several exchanges have turned their attention to developing purpose-built exchanges. NFT marketplace MagicEden has attempted to tackle this by mandating three transactions: one for the seller, one for the buyer and one to unify them.
Satflow trades also involve three transactions, which makes them "unsnipable in mempool," one of the project's founders Robert Clarke told CoinDesk in a Telegram message.
"Both Satflow and other exchanges will still process 'legacy' trades that can be sniped, but we're expecting the market to shift quickly over to secure-purchase and other non-snipable trades," he added.
"Existing DEXs have built their experience that feels more oriented for Etherem or Solana, but trading on Bitcoin is unique in that you need to build from a mempool-first perspective," Satflow said in an announcement on Wednesday.
The DEX will cater to high-volume traders who are seeking a more efficient experience when dealing with Ordinals or Runes.
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