OP_CAT’s BIP-420 proposes to revive Bitcoin covenants

OP_CAT recently unveiled its BIP-420 proposal amid the ongoing discourse surrounding covenants within the Bitcoin community.

According to Udi Wertheimer on X, an advocate for OP_CAT, the proposal aims to enable covenants on Bitcoin, opening avenues for smart contracts, secure bridges, on-chain trading, zk proof verification, and more. However, it’s worth noting that the proposal hasn’t yet gained official status as a Bitcoin Improvement Proposal (BIP).

Covenants on Bitcoin (BTC), in essence, are sophisticated scripting features dictating specific conditions on how bitcoins can be spent in future transactions.

Covenants have the potential for various use cases, from creating secure vaults that facilitate reversible transactions to enabling automated recurring payments, time-locked transfers for inheritance purposes, and even complex financial instruments like escrows and bonds.

Originally, OP_CAT was part of Bitcoin’s early opcodes but was disabled by Satoshi Nakamoto in 2010 due to concerns about potential vulnerabilities. An opcode, a command within the Bitcoin scripting language, is crucial in executing operations within Bitcoin scripts.

The proposal, spearheaded by Ethan Heilman and Armin Sabouri, proposes reintroducing OP_CAT through a backward-compatible soft fork, specifically by redefining the opcode OP_SUCCESS126, which aims to mitigate confusion by retaining the original opcode value.

The proponents argue that reintroducing OP_CAT would enhance Bitcoin’s capabilities, simplify decentralized protocols, support advanced multi-sig setups, and expand Bitcoin’s scripting power and flexibility.

However, realizing an OP_CAT soft fork hinges on technical feasibility, security considerations, and achieving consensus within the community.

Besides OP_CAT, several other covenant proposals are under consideration within the Bitcoin ecosystem, each with its unique approach and potential trade-offs. These include Check Template Verify (CTV), OP_CHECKSIGFROMSTACK (CSFS), and LNHANCE, each offering different functionalities and levels of formalization in their proposals.