Tutorial: How to Trade BTC Tx Fees

Getting Started

The core market logic is facilitated by Silica Pools. A Pool is the set of all long and short positions within the same period (e.g. April 1 - April 30). Users can enter, trade, or close their positions anytime during the Pool’s period. The Silica Pools are implemented as a system of smart contracts. To interact with Alkimiya, first you need to connect your wallet.

If you are bullish on the network activities during the Pool’s period (expect the average network transaction fees to increase) you can enter into a long position.

If you expect the network activities to cool down (expect the average network transaction fees to decrease) you can enter into a short position.

How to Long BTC Tx Fees?

  1. You can see available orders, their breakevens, and the total payment required to fill them in the table on the trade page.

  2. After selecting the orders, you can see a summary of the total size (denominated in kB), and the breakeven level of your trade. You are betting that the final average tx fees will be above this level.

  3. To confirm the trade, you have to submit an upfront payment:

    Payment = breakevenPrice * size
  4. You will receive NFTs that represent their long positions in the Pool. You can then freely trade these. All long positions in the same Pool are fungible regardless of their breakeven price.

  5. The BTC Tx Fees Index is the underlying benchmark. The index tracks the median BTC/kB per block. The Pool tracks the rolling average of the index since the start (e.g. April 1).

  6. Upon settlement (e.g. April 30), you can claim your rewards! The final payout is based on the average of the median BTC/kB per block across all blocks during the Pool’s period.

    Payout = min(cap, avg(index in Pool’s Period)) * size

How to Short BTC Tx Fees?

  1. You can see available orders, their breakevens, and the total payment required to fill them in the table on the trade page.

  2. After selecting the orders, you can see a summary of the total size (denominated in kB), and the breakeven level of your trade. You are betting that the final average tx fees will be below this level.

  3. To confirm the trade, you have to submit an upfront payment:

  4. You will receive NFTs that represent their short positions in the Pool. You can then freely trade these NFTs. All short positions in the same Pool are fungible regardless of their breakeven price.

  5. The BTC Tx Fees Index is the underlying benchmark. The index tracks the median BTC/kB per block. The Pool tracks the rolling average of the index since the start (e.g. April 1).

  6. Upon settlement (e.g. April 30), you can claim your rewards! The final payout is based on the average of the median BTC/kB per block across all blocks during the Pool’s period.

    Payout = max(0, (cap - avg(index in Pool’s Period))) * size

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