Author: Bob Bodily Source: X, @BobBodily Translation: Shan Ouba, Golden Finance
OP_CAT will enable native tokens on Bitcoin L1, but you may not care for the following reasons:
1. Too slow
Token transactions should be as fast as the speed of light, not as slow as Bitcoin. Use CAT for trustless (or trust-minimized) bridging and trade tokens quickly and cheaply on L2.
2. Too inefficient
Maintaining token status in CAT Caboose (UTXO that provides smart contract data) is a fascinating idea from a technical perspective, but a bad idea from a practical perspective. Who wants to maintain the state of Bitcoin L1 in CAT Cabooses?
3. Too many restrictions
It is very painful to write smart contracts using CAT and recursive contracts. Although teams such as Rijndael have made some progress on projects such as Purrfect Vault, CATNIP, and CatVM, building programmable applications on Bitcoin L1 is still very limited. A better option is to do this on L2.
4. Too Costly
Maintaining state, fully uncompressed data availability (DA), recursive contracts, and all transactions on Bitcoin L1 means that everyone has to bear high transaction fees.
We don't just need CAT, we also need scalability and programmability on L2.
Currently (in the past 12 hours), there are multiple CAT token implementations: CATNIP and Cat Protocol (CAT-20) by the Taproot Wizard team.
None of these can be run on Bitcoin for the time being.
But they can be run on other CAT-enabled chains (such as Fractal, etc.).
While these CAT token protocols may work well on Fractal or other chains, they are not Bitcoin! They are separate chains, separate proofs of work (PoW), separate tokens.
And for a brand new chain, let’s compare Fractal to Solana… so I don’t expect much from these CAT token protocols.
In the future, these CAT token protocols will run on Bitcoin (via OP_CAT), but I don’t think this is a good way to implement tokens on Bitcoin: too slow, too inefficient, too limited, and too expensive.
It’s better to do DeFi on a trustless or minimal trust Bitcoin L2.
Hope you enjoyed my critical, cynical, and skeptical take on CAT tokens!
If you think CAT tokens will really shine, please tell me what I missed.
