Summary：

Pipe Protocol emerges as a game-changer for Bitcoin, enabling tokenized assets and smart contract-like functionality on the OG blockchain. Inspired by RUNES and Ordinal’s BRC-20, it overcomes its limitations by offering fair minting, decentralized infrastructure, and simplified operations. However, Pipe protocol also introduces a layer of complexity to Bitcoin’s already intricate architecture. Read this article to grasp the core functions of Pipe protocol, understand its advantages and disadvantages, and discover how to buy tokens on Pipe protocol.

Understanding the Pipe Protocol

Introduction

From the onset, the Bitcoin network did not natively support tokenized access and applications on its network, but with advancements in technology, a lot has changed for the blockchain. It is now possible for tokenized assets to be hosted on the Bitcoin network - one of the protocols that made it possible is the Pipe protocol. In this article, we will explain what the Pipe protocol is, how it works, and what are its advantages and disadvantages.

What is Pipe Protocol?

The Pipe protocol proposed by BennyTheDev is a bitcoin-native token protocol with three main functions inspired by the concept of Casey Rodarmor’s RUNES and Ordinal’s BRC-20.

Pipe protocol provides a structural way to deploy, mint, and transfer tokens on the Bitcoin network. This enables Bitcoin to exhibit smart contract-like behavior of decentralized applications and tokenized assets, a feature common with smart contract-enabled blockchains like Ethereum. Pipe Protocol leverages Bitcoin’s robust and secure blockchain infrastructure while adding a new level of functionality, making it a decentralized protocol.

Pipe aims to integrate the best features of both RUNES and BRC-20 concepts—since RUNES prevents fair mint, a crucial component of BRC-20, which makes all of its token security a result of centralized distribution—to avoid security classification.

Improvement of Pipe Protocol over Rune

Runes is a Bitcoin fungible token protocol designed by Casey Rodarmor to have a small on-chain footprint and to encourage careful UTXO management. At its core, Runes is designed to solve the issue of double spending on the Bitcoin Network created by Ordinal’s BRC-20 by aligning with the infrastructure of Bitcoin seamlessly, and this alignment brings significant advantages.

Runes prioritizes minimizing the UTXO set. In simple terms, this approach helps prevent the unnecessary creation of UTXOs, contributing to the overall efficiency of the Bitcoin network.

However, Runes protocol was not actualized due to its lack of a fair minting mechanism, which led to the conceptualization of Pipe Protocol. Here are the improvements of Pipe Protocol over Runes:

• In Runes, fair minting is not possible. You have to mint all tokens by yourself and then distribute them, but Pipe Protocol allows fair minting.
• Due to its lack of a fair minting mechanism, Runes results in centralized token distribution, while Pipe Protocol is decentralized as it leverages Bitcoin infrastructure.
• Runes currently exist only as a conceptual design with no actual applications. PIPE, on the other hand, is a protocol implemented by BennyTheDev, a renowned developer in the Bitcoin ecosystem, based on the technical architecture mentioned in Casey’s article. The PIPE Protocol is an important component in BennyTheDev’s TRAC ecosystem.

Main Functions of Pipe Protocol

Similar to BRC-20, Pipe protocol has 3 main functions, which are the Deploy function, Mint function, and Transfer function.

• Deploy function: The deploy function initiates a new token with defined attributes such as ticker name, maximum supply, and minting unit.

Source: BennyTheDev Github repository

• Mint function: The mint function allows the creation of new tokens in accordance with the supply and meeting regulations specified during deployment.

Source: BennyTheDev Github repository

• Transfer function: The transfer function facilitates the sending of a token to a specific recipient on pipe protocol.

Source: BennyTheDev Github repository

Advantages of Pipe Protocol

• Compatible with UTXO model: The pipe protocol is compatible with Bitcoin’s UTXO model, ensuring full compatibility with Bitcoin’s native architecture
• Simplified operational process: Pipe protocol has a simple and easy-to-understand operational design to facilitate high user interaction with the protocol.
• Fair minting mechanism: The Pipe protocols offer a fair minting mechanism to address the fairness issue in the Bitcoin network.

Disadvantages of Pipe Protocol

• Technical complexity: Pipe protocol makes Bitcoin’s already sophisticated infrastructure more complex thereby making it more difficult to understand and comprehend for developers and regular users.

Tokens on Pipe Protocol

BennyTheDev, a renowned developer in the Bitcoin ecosystem, launched the first token on Pipe Protocol, $PIPE, on September 27th, 2023.

$PIPE quickly rose to 0.5$ OTC and attracted a lot of attention from the Bitcoin community. It has the following features that make it unique and valuable:

• It is the first token ever on Pipe Protocol, setting a precedent for future tokens on Pipe Protocol.
• It has a fixed supply of 21 million, mirroring Bitcoin’s scarcity and deflationary nature.
• It allows fair and free minting, meaning anyone can mint $PIPE tokens without giving up any ownership to the team or central authority.
• It has historical value, as it represents the first step towards enabling smart contract-like functionality on Bitcoin, which has been a long-standing challenge and aspiration for many developers and enthusiasts.
• The team did not mint any amount of $PIPE tokens for themselves, demonstrating their commitment to fairness and decentralization.

Following the success of $PIPE, other tokens with solid volume and use cases emerged on Pipe Protocol, such as $RUNE, $ETCH, and $INS. These tokens showcase the potential and diversity of Pipe Protocol, as they enable different applications and services on Bitcoin Network.

Source: SatsX Official Website

How to Buy Tokens on Pipe Protocol

Since the pipe protocol is still new and in the development phase, there are just two ways to buy tokens on Pipe protocol which are OTC trading and through pipe infrastructure.

OTC Trading

OTC trading stands for over-the-counter trading, which means trading directly with another party without using an intermediary or a platform.

OTC trading can be done through various channels, such as online forums, chat groups, or social media. One of the places where users can buy tokens on the Pipe protocol via OTC trading is the official TRAC discord server, where verified OTC traders offer Pipe protocol tokens for sale. However, users must be careful to avoid being scammed by unverified or fraudulent OTC traders on the server or elsewhere.

Through Pipe Infrastructure

Pipe infrastructures are tools or applications that are built on or support the Pipe protocol. These infrastructures can facilitate interaction and token management on the Pipe protocol. Some examples of Pipe infrastructure are:

Inscrib3

Source: Inscrib3 official website

Inscrib3 is a dedicated, fully non-custodial wallet extension that makes interaction and token management easier on pipe protocol. To use the Inscrib3 wallet:

• Download the wallet extension from the official release page
• Go to chrome://extensions/ or brave://extensions/
• Toggle on the developer mode
• Click on load unpacked file and select the downloaded folder

Pipeline

Pipeline is a Pipe protocol indexer that allows users to find out what tokens they are holding in their wallet, as well as the token supply and transactions. Pipeline works like an explorer but for the Pipe protocol. To use Pipeline, users need to enter their wallet address or the token identifier on the website.

RuneXTech

Source: RuneXTech official website

RuneXTech is a discord-integrated, decentralized exchange that allows users to trade tokens on the Pipe protocol. To use RuneXTech, users need to join the discord server and follow the instructions.

SatsX

Source: SatsX Official website

SatsX is a decentralized pipe protocol marketplace that helps users buy and sell pipe protocol tokens using the Unisat wallet.

Conclusion

Pipe Protocol doesn’t just add tokens to Bitcoin, it unlocks a new chapter for the OG blockchain. It bridges the gap between Bitcoin’s security, decentralization, and the flexibility of smart contracts, offering a fair and accessible platform for tokenized assets and DeFi applications. Will you join the Bitcoin network renaissance?

Name: Angelnath

Date: 22/12/2023

The article is original and has been checked for accuracy. If the article is accepted, the article is copyrighted by Gate.io