Introduction

Bringing liquidity home to Bitcoin

DotSwap Nexus Protocol represents a fundamental advancement in Bitcoin-native financial infrastructure, delivering the foundational layer for a comprehensive Bitcoin Financial Layer. Developed by DotLabs, the protocol addresses the critical infrastructure gap between Bitcoin's secure settlement layer and the sophisticated financial operations required for a mature digital economy.

The protocol's architectural innovation lies in its pure Bitcoin-native approach—leveraging UTXOs, multi-signature schemes, and Partially Signed Bitcoin Transactions (PSBTs) to enable complex financial operations without introducing additional trust assumptions. This design preserves Bitcoin's consensus-driven security model while unlocking advanced capabilities including atomic multi-party swaps, concentrated liquidity provision, and intent-based transaction coordination.

Central to the protocol's design is intent-based execution, where users specify desired outcomes rather than explicit transaction paths. The Nexus Composer processes these intents and coordinates with a network of Nexus Nodes to find optimal execution across multiple liquidity sources. Users can participate as liquidity providers either by operating their own Nexus Nodes or by contributing to the DotSwap Nexus Node—a user-friendly platform operated by DotLabs that enables multiple users to pool liquidity through an intuitive graphical interface.

The protocol architecture consists of three core technical components: the Nexus Composer providing intent matching and transaction coordination, Nexus Nodes enabling self-custodial liquidity provision by independent makers, and the DotSwap Nexus Node offering a managed platform where multiple users can participate as liquidity providers without technical complexity.

This modular framework supports diverse deployment scenarios while maintaining protocol-level interoperability, enabling everything from individual retail trading to institutional market-making operations within a unified liquidity ecosystem.