XLink, formerly the ALEX Bridge, is a Bitcoin Bridge developed by ALEX, a Bitcoin DeFi platform. XLink bridges the gap between Layer 1 and 2 protocols, providing a "native-like" Bitcoin DeFi experience on L1. It allows users to interact with L2 smart contracts using native BTC or L1 assets from Bitcoin without being affected by the variations between the two layers. ^[1]

The XLinkDAO governs XLink.

History

“ALEX Lab Foundation proposes to our community that we spin-off ALEX Bridge into a separate entity called XLink, because the secure and efficient performance of a crypto bridge is best assured when the validators and others securing it are the key stakeholders that govern it.”

In November 2023, the majority of $ALEX and $atALEX token holders backed the transition of the ALEX Bridge to become an independent entity named XLink. Emerging from AlexLabs, creators of the ALEX Bitcoin DeFi platform, XLink focuses on innovating by combining the security of Bitcoin's foundational layer with the flexibility of Layer 2 protocols. While operating autonomously, XLink maintains a collaborative relationship with its parent platform, sharing the mutual goal of advancing the Bitcoin ecosystem. XLink aims to offer BTC holders efficient access to opportunities within the Stacks ecosystem, emphasizing benefits such as reduced gas fees and improved liquidity. ^[2][3]

Overview

Launched in December 2023, XLink is a native Bitcoin Bridge, facilitating seamless connectivity between Bitcoin and Ethereum's ecosystem. Its primary objective is to streamline interactions between Bitcoin and EVM DeFi platforms, enhancing efficiency and user experience. By directly validating Bitcoin events, XLink enhances security and simplifies transactions, mitigating risks and delays commonly faced in cross-chain operations. Additionally, XLink is important in facilitating smoother Bitcoin Automated Market Maker (AMM) swaps, thereby enhancing the efficiency of BTC transactions in the DeFi space. ^[1][4]

XLink abstracts the differences between Layer 1 and 2 protocols to provide a seamless Bitcoin DeFi experience on L1. It enables users to engage with L2 smart contracts using native BTC or L1 assets issued on Bitcoin, operating bidirectionally to facilitate asset transfers between Bitcoin and its L2s. On Bitcoin, users interact with Multi-sigs to lock assets for bridging, while on L2s, they interact with "Endpoints" to receive bridged assets. Asset transfers are monitored by validators who produce cryptographic proofs to ensure accuracy, with a minimum threshold required before assets are sent to the relevant address. Integration with ALEX's Bitcoin Oracle for necessary consensus infrastructure enhances the functionality of the Bitcoin Bridge, facilitating the transfer of received destination assets upon meeting the minimum threshold. ^[1][4]

ALEX BTC (aBTC)

aBTC, also known as ALEX BTC, operates as a fully functional SIP010 token within the Stacks ecosystem, where each unit of aBTC represents an equivalent amount of Bitcoin locked in the multi-sig operated by the ALEX Lab Foundation. Its function is comparable to WETH for Ethereum, facilitating the interaction of BTC with smart contracts on the Bitcoin network. When a BTC holder engages with smart contracts on Stacks, Bitcoin Bridge receives the BTC into its multi-sig. It initiates the minting of corresponding aBTC, enabling interaction with relevant smart contracts on behalf of the BTC holder. Conversely, aBTC holders can interact with smart contracts on Stacks to withdraw BTC into their Bitcoin wallets, prompting Bitcoin Bridge to burn aBTC and release the corresponding BTC from its multi-sig. ^[5]

XLNK

In a governance proposal submitted on February 6, 2024, XLink plans to launch the XLNK token, which will be overseen by the XLink DAO Foundation (XLinkDAO), which was established to govern XLink's operations and ensure its sustained development. Governed by the ALEX Lab Foundation (ALEX), which ALEX token holders oversee, this governance structure ensures that the value generated by XLink and XLNK benefits the ALEX ecosystem and its contributors. A strategic allocation of 10% of the XLNK supply will be awarded to ALEX holders, allowing them to participate directly in XLink's governance while remaining engaged with ALEX. These tokens will be distributed gradually to economically contributing ALEX holders over time. XLNK serves as the operational token for XLink, meeting its distinct needs for operational funds, marketing resources, and governance. The proposed tokenomics will fund XLink's operations and ecosystem expansion, attract institutional investment, incentivize validators to secure the bridge, and potentially be used as payment for bridge services. ^[3]

Tokenomics

The proposed maximum supply of $XLNK is set at 1 billion tokens, distributed across various allocations as follows: ^[3]

• Market campaign and Initial Token Sales: 10%
• Allocation to $ALEX holders: 10% for staking and farming rewards, including ALEX Staking (Manual Staking and atALEX), ALEX/STX Farming, and ALEX/atALEX Farming
• Strategic buyers: 10%, subject to a 24-month vesting period
• XLinkDAO Treasury Reserves: 70%, earmarked for operational and developmental purposes, including:
  • Working Capital: 25%, to be utilized at the discretion of XLinkDAO
  • Validators Incentives: 25%, to be allocated at the discretion of XLinkDAO
  • Ecosystem Growth: 20%, to be allocated at the discretion of XLinkDAO