Bitcoin’s developer ecosystem is the hottest it has been in years. Projects, tools, and proposals to unlock new decentralized applications for the OG crypto network are now part of the mainstream Bitcoin conversation.
One proposal central to that conversation is BIP-347, or “OP_CAT”—though called BIP-420 by some proponents—a potential soft fork upgrade that proponents think could supercharge Bitcoin’s capabilities.
At a bare-bones level, what OP_CAT does is allow users to join, or “concatenate,” two pieces of data within a stack. It then places those values on top of the stack, making them the first items acted on within a transaction.
In theory, this gives Bitcoin more utility. But just useful could it be, and are its benefits being oversold?
“CAT makes everything better,” said Bob Bodily, co-founder and CEO of Bitcoin marketplace Bioniq, to Decrypt. Bodily’s Twitter profile picture features a Quantum Cat, an Ordinals NFT from the collection launched by Taproot Wizards in January as an advertisement for the proposed Bitcoin upgrade.
“OP_CAT is way bigger than I originally understood”
“I am truly surprised”
“Bitcoin has a promising future”If you haven’t had this realization yet, get studying. CAT is changing Bitcoin forever. https://t.co/X2stx8xbNV
— Bob Bodily, PhD 👋 | #BTC #ETH #ICP 🧙🏽♂️ (@BobBodily) May 6, 2024
Bodily regularly posts reviews of the growing body of layer-2 systems being built on Bitcoin. His analysis of systems like BitVM2 points to their benefits and limitations for breaking Bitcoin’s technical barriers, and highlights how changes to Bitcoin Core can improve those protocols.
“Take the BitVM model (or BitVM2), and CAT makes it significantly better—more efficient, cheaper, more flexible,” he said. Between “covenants,” “vaults,” and “transaction introspection,” Bodily believes it’s difficult to think of good reasons to be against OP_CAT that hold up to scrutiny.
Yet some Bitcoin builders believe that OP_CAT’s benefits are being exaggerated. Robin Linus, co-author of the aforementioned BitVM2, published a document in August debunking “common fallacies” he hears from OP_CAT proponents.
Take covenants, for example, which are payments that can only be executed when custom conditions are met. Though OP_CAT could technically emulate covenants on Bitcoin, Linus said they would be “inefficient in terms of block space and transaction fees” and impractical next to alternative soft fork proposals purpose-built for covenants.
“I am mostly excited about covenants as they can remove the trusted setup from BitVM, but I am not a big fan of the convoluted emulation enabled by OP_CAT,” Linus told Decrypt.”But the stuff that StarkWare is doing with cat starks is cool.”
Let’s focus on facts, not fiction, when discussing proposals like op_cat. Informed decisions lead to better outcomes.https://t.co/QfZ7N0kHP9
— яobin linus (@robin_linus) August 22, 2024
Linus clarified that his article was a rebuttal to claims about OP_CAT’s purported superpowers—of which covenants are one of the most popular—rather than the soft fork proposal itself. But historically, he has also been no fan of the pro-OP_CAT Taproot Wizards team, who he labeled as “trolls” for writing “sensational” articles that “unfairly” attacked his work on BitVM.
“If promoting your soft fork requires lies, it must be rejected,” tweeted Linus last Sunday.
When asked about Linus’s covenants criticism, Bodily from Bioniq agreed on the substance, but noted that OP_CAT is the only soft fork proposal that could enable covenants that also has support from the “broader Bitcoin ecosystem” right now.
“CAT is more of a lower-level primitive that benefits everyone building on Bitcoin,” he explained. “You get more than just covenants. But many people just focus on the covenants aspect.”
What makes OP_CAT intriguing is that it’s actually old technology. The OP_CAT opcode existed in Bitcoin’s original protocol, but was removed by pseudonymous creator Satoshi Nakamoto in 2010 due to early security concerns.
For people worried about making protocol changes that shake up Bitcoin’s trademark stability and security, the proposal’s unique history with Bitcoin’s past is often cited to ease those concerns. It also only includes 10 lines of code, minimizing the potential of bugs it could introduce to Bitcoin, if any.
BREAKING: Director of Research @ Blockstream and Co-inventor of Taproot says path for OP_CAT is finally clear – ETHAN AND ARMIN FINALLY DID IT – UNBELIEVABLY SIMPLE
”You look at CAT and there’s nothing to bikeshed on – almost no technical risk – everyone likes CAT” pic.twitter.com/YH4dPuXPQL
— Eric Wall | BIP-420😺 (@ercwl) February 5, 2024
“CAT is almost certainly 100% safe,” said Paul Sztorc, author of the BIP 300 “Drivechains” Bitcoin soft fork proposal, to Decrypt. “It was in earlier versions of Bitcoin, it is in Bitcoin Cash now, it doesn’t really do anything.”
“Also, it is possible to just shut cat off like a light switch later if we want,” he added. However, Sztorc said he’d like to see a successful test network and wallet with CAT implemented to see if it can really enable the wondrous powers its proponents claim. “The promoters of CAT are probably overselling it a bit,” he said.
The last of Linus’ criticisms concern the notion that OP_CAT won’t introduce maximal extractable value, or MEV, to Bitcoin. MEV refers to the potential profit miners can earn by reordering transactions inside of a block, for which there are more opportunities on a programmable chain.
According to Linus, MEV would lead to a distortion of miner incentives that could potentially lead to the censorship of transactions.
“The design space for OP_CAT-based token standards and DeFi applications is largely unexplored, and we cannot foresee all the innovations that might emerge and how they affect MEV,” he wrote.
Should OP_CAT introduce any friction, Bodily argues that the soft fork will also enable Bitcoin layer-2 networks that help migrate such expressive transactions off-chain. “Who wants to build and transact on Bitcoin L1 when they can just go directly to an L2 to do it cheaper and faster and better?” he asked.
Atomic Finance CEO Tony Cai added that this is the only one of Linus’ points that he disagreed with, given that MEV “already exists on Bitcoin.”
“Upon the creation of token standards like Runes/BRC-20, MEV has already started existing on BTC,” he told Decrypt. Should developers go building computationally expensive applications on Bitcoin L1, such as automated market makers (AMMs), they will likely go unused since the network is too slow and expensive to make them practical, he added.
“The user experience would be so horrendous,” he said.
Edited by Ryan Ozawa.
