Why is Unigraph needed?

Indexers are an integral part of Bitcoin token standards. Whilst the inscriptions for these tokens are recorded on-chain, the Bitcoin network does not have a virtual machine and doesn’t have any way to read or interact with inscriptions. Only indexers can interpret this data and determine whether it meets the criteria for a particular token or ordinals collection and to read transactions. Without an indexer, inscriptions would be useless.

To navigate these limitations, a variety of off-chain indexers have been developed for Bitcoin token standards. Indexers track inscriptions and token mints and trace transactions of these inscriptions between different wallets to confirm their authenticity. Its possible for anyone to create and run such an indexer, but this is unfeasible in reality for all market participants, and so the vast majority of people rely on a handful of indexers.

However, the current indexers fall short of the requirements for a robust and fair ecosystem for participants. Bitcoin token standards such as BRC20 have become dependent on centralized off-chain indexers which introduces a number of unnecessary risks. Centralized indexers are vulnerable to errors, whether unintentional due to subpar performance or intentional, stemming from censorship or malicious actions. Such errors can jeopardize the security of user transactions and assets.

In response, there's a growing need to establish a robust, on-chain system for indexing that is both tamper-proof and resistant to censorship. This development is aimed at reducing reliance on any single centralized entity, thus lowering the risk associated with centralization.

This move towards a decentralized indexing system is vital for the security and reliability of Bitcoin token standards. By shifting away from centralized indexers to a decentralized approach, Unigraph aspires to attain a level of trust and immutability akin to well-established blockchain systems. This transition is key to building user confidence and promoting broader acceptance of Bitcoin token standards.