What is OP_CAT?

Functions of OP_CAT

OP_CAT functions like a concatenation command found in other programming languages—it combines two elements into one, allowing multiple strings to connect. In the Bitcoin network, this means joining multiple UTXO unlock script bytes together. Though simple in concept, this function significantly expands Bitcoin’s smart contract capabilities, enabling it to handle more complex data and operational logic. Use cases include:

• Multi-signature OptimizationIn
  In multi-signature scenarios, OP_CAT can combine multiple signatures into one, reducing the number of required signature submissions. This creates more concise transactions, speeds up network verification, uses less block space, and lowers transaction fees.
• State Contracts
  On the blockchain, state represents all data stored along the chain, including user balances, smart contract variables, and other blockchain information. State contracts are smart contracts that maintain and update these current states based on specific operations. For example, when a DeFi smart contract (A) manages token balances in a liquidity pool, A updates and preserves the latest token quantities whenever users deposit or withdraw.
  In complex decentralized applications, state contracts must handle large amounts of data and multiple functions. Take lending protocols, for instance—their state contracts track users’ deposits, loans, and collateral balances, updating them with market changes and executing liquidations when collateral falls too low. OP_CAT helps by connecting large amounts of state information, enabling more precise operations through layered conditions.
• Payment Channel Network Scalability
  In payment channel networks like the Lightning Network, parties make multiple transactions off-chain and only settle final balances on-chain. OP_CAT connects various payment requests, enabling more efficient transaction management in payment channels, greatly improving network throughput and performance.

In simple terms, OP_CAT enhances Bitcoin’s script language by enabling higher composability—it lets developers combine multiple simple script fragments to create more complex operations, ultimately improving the Bitcoin network’s scalability.

Development History

OP_CAT existed in the early Bitcoin scripting language. However, using multiple concatenations with OP_CAT could cause the script size to grow exponentially, far exceeding memory limits and potentially crashing nodes. For security reasons, Satoshi Nakamoto removed OP_CAT from Bitcoin’s opcode set.

In recent years, as the Bitcoin ecosystem has evolved, the demand for native smart contracts has grown. The Segwit and Taproot upgrades increased block capacity from 1MB to 4MB and limited stack element sizes to 520 bytes via Tapscript, mitigated the risk of infinite expansion, paving the way for OP_CAT’s reintroduction.

In October 2023, Bitcoin Core developer Ethan Heilman and Botanix Labs’ lead software engineer Armin Sabouri jointly published a Bitcoin Improvement Proposal (BIP). This proposal, containing only 13 lines of concise code, defined a new Tapscript opcode that allows the concatenation of two bytes on the stack, clearly inspired by the previously removed OP_CAT.

source: Github

The proposal was officially designated as BIP-347 and garnered support from notable figures in the Bitcoin space, including Tadge Dryja, co-author of the Lightning Network white paper, Olaoluwa Osuntokun, co-founder of Lightning Labs, and Andrew Poelstra, head of research at Blockstream. The aim is to implement it on the Bitcoin network through a soft fork.

However, while OP_CAT can enhance Bitcoin’s smart contract capabilities, it also increases the overall complexity of the network. Any minor errors or vulnerabilities could potentially lead to severe security issues. For the Bitcoin community, security and stability have always been top priorities. Any proposal that could pose a significant threat to the network undergoes lengthy and rigorous scrutiny and widespread discussion.

As a result, OP_CAT has not yet been implemented on the Bitcoin mainnet. Instead, it was first adopted by the Bitcoin fork network, Fractal Bitcoin, where multiple protocols built on OP_CAT have been developed.

Introduction to CAT Protocol

The CAT (Covenant Attested Token) Protocol is a token protocol introduced by an anonymous team on Fractal Bitcoin, developed based on OP_CAT. According to its official white paper, it features the following characteristics:

• No Reliance on External Indexers
  The rules, data, and operational logic of CAT tokens are stored on-chain. Sending or receiving tokens does not require third-party indexers; instead, all necessary information is directly extracted from the blockchain. Bitcoin’s consensus entirely protects its security, avoiding inconsistencies between external indexers and on-chain data.

• Modularity
  CAT tokens’ operations are supported by OP_CAT, giving them a high degree of composability. They can flexibly interact with other smart contracts, supporting decentralized applications like Automated Market Makers (AMMs), lending, and staking. This expands Bitcoin’s application potential.

• Programmable Minting
  Token minting rules and execution are verified by smart contracts rather than external indexers. Issuers can freely define token issuance rules, and the network automatically rejects minting requests exceeding the total supply cap.

• Cross-Chain Interoperability
  Assets can be transferred across different blockchains, enabling applications to be deployed on multiple chains and perform complex cross-chain operations.

• SPV Compatibility
  Supports Bitcoin’s Simplified Payment Verification (SPV) lightweight verification mechanism. Light clients (e.g., mobile devices or browser plugins) only need to download block header data to verify the authenticity of token transactions without relying on any centralized servers.

Currently, CAT Protocol offers two token standards: CAT20 and CAT721. The first CAT20 token, CAT, and the first CAT721 collection, Locked-up Cats, were launched on September 11 and October 31, respectively. The total supply for CAT is 21 million, while Locked-up Cats is limited to 10,000. Both are open for fair minting by anyone.

source: Satosea

Team Background

The CAT Protocol is not the first token protocol deployed on Fractal Bitcoin. Prior to it, the first token protocol launched was FLUX, which used the slogan “First is First” to attract early traffic. The token, with a total supply of 21 million, was fully minted within just half an hour, and its price briefly reached 50 USDT. However, FLUX did not garner significant attention.

Two days later, when CAT launched, it far surpassed FLUX in popularity, sparking a massive market FOMO. This surge caused Fractal’s network fees to skyrocket from 100 to 1500. The reason for this phenomenon lies in the fact that shortly after CAT’s launch, Unisat updated its Fractal browser interface to include a dedicated CAT20 section. This led to speculation within the community about whether Unisat might be the team behind CAT. However, Vivian, a member of both the Unisat and Fractal teams, did not directly address this question, only stating that the official stance is to support all projects building on Fractal.

Additionally, the community has speculated that the team behind CAT could potentially be sCrypt Official, a group with extensive expertise in the OP_CAT field. This team not only has a deep understanding of OP_CAT but also previously received 10,000 FB tokens from Fractal to support ecosystem development. Furthermore, the graphic styles and text used in the CAT Protocol’s official documentation are similar to those typically used by sCrypt Official, further fueling these speculations.

source: ChainCatcher

These possibilities remain unconfirmed community speculations. However, regardless of the actual situation, it’s clear that the CAT Protocol team maintains strong connections with both Unisat and Fractal.

The comparison of BRC-20, Runes, and CAT Protocol

Source: Fractal

This April, as Bitcoin’s block reward halving occurred—a milestone that happens once every four years—topics surrounding the Bitcoin ecosystem once again became a focal point for the market. Over the past one to two years, several new token standards have emerged in succession, including BRC-20, Runes, and CAT Protocol. All three aim to enhance Bitcoin’s scalability through different technological innovations. Below, we analyze the strengths and weaknesses of these standards, primarily in terms of security and functionality.

Security

In blockchain, the level of security is largely determined by the degree of decentralization. The more decentralized a protocol, the fewer trust assumptions are required, and thus, the higher the security. Conversely, a lower level of decentralization results in lower security.

BRC-20 operates by binding token data to individual satoshis (sats), while Runes uses the OP_RETURN opcode to attach token data to UTXOs. Both record information such as token supply, transfers, and user balances on Bitcoin’s blockchain to ensure immutability. However, Bitcoin’s network is only used for “recording” this data; it does not “recognize” these transactions.

As a result, every transaction for BRC-20 or Runes requires external third-party indexers to query balances and calculate amounts before broadcasting and recording transfers on-chain. While the ledgers for BRC-20 and Runes are decentralized, their settlement processes are centralized, introducing trust risks associated with external indexers.

In contrast, CAT Protocol uses Bitcoin’s native scripting language OP_CAT for operations. This ensures that all transactions are validated and protected directly by Bitcoin’s consensus mechanism. However, this also poses a potential security risk. By fundamentally expanding Bitcoin’s smart contract capabilities, OP_CAT could introduce significant vulnerabilities that threaten the broader network. This is one of the reasons OP_CAT has not been implemented on Bitcoin’s mainnet and is limited to Layer 2 networks or forks like Fractal and Bitcoin Cash, which support OP_CAT.

Functionality

In terms of functionality, BRC20 emerged as the first fungible token standard on the Bitcoin network but faces several limitations: it can only transfer one type of BRC20 token per transaction, requires a minimum of 3 transactions for token transfers, and generates numerous small UTXOs that strain storage and bandwidth.

Runes, developed as an enhancement to BRC20, can store multiple tokens within a single UTXO, effectively resolving the UTXO bloat issue and completing most operations in just one transaction. However, while Runes addresses BRC20’s inefficiencies, it remains constrained by Bitcoin’s inherent framework—merely improving asset transaction efficiency and reducing network load without introducing new applications.

CAT Protocol directly benefits from Bitcoin script language upgrades, with its main feature being not just creating new Bitcoin assets, but enabling more complex and granular operations on assets. Its modular design gives it enormous application potential, greatly expanding the Bitcoin network’s use cases. However, this comes with certain security concerns, and it still needs validation and approval from the Bitcoin Core community before it can be launched on the mainnet.

Conclusion

Since its launch, hackers have never successfully attacked the Bitcoin network. Its exceptional stability and security have earned it the title of “digital gold,” making it the most stable crypto asset in the industry. However, this stability has also become a major obstacle to its path toward large-scale application.

As discussions surrounding the Bitcoin ecosystem continue to arise, CAT Protocol undoubtedly stands out as one of the best solutions currently available for expanding Bitcoin’s smart contract capabilities. However, the Bitcoin community has long harbored fears and mistrust toward smart contracts. There is also ongoing debate and conflict over whether reviving the OP_CAT opcode, which Satoshi Nakamoto removed, undermines Bitcoin’s “orthodoxy.”

Bitcoin’s development is still in its early stages, and whether CAT Protocol will become the key to unlocking the potential of the Bitcoin ecosystem in the future remains uncertain. Both its technical implementation and community consensus will require time to mature further.