Taproot Wizards launched a cartoon yesterday referred to as CatVM. I can’t confer with it as a whitepaper, these are actual educational paperwork for adults. Within the cartoon, interspersed amongst the absurd infantile narratives, have been a couple of beneficial technical insights concerning completely different scaling proposals within the Bitcoin ecosystem. After all, in true cartoon trend, buried between wild exaggeration and embellishment.
The tip aim of the cartoon was to suggest a brand new mechanism for transferring out and in of scaling layers constructed on high of Bitcoin. To disentangle that precise proposal from the cartoon, we’ll have to interrupt down the 2 items concerned.
The Constructing Blocks
Rijndael’s first OP_CAT experiment was establishing a vault, a scheme that permits a person to create an intermediate “staging” transaction to withdraw their funds from the vault. This kicks off a timelock, throughout which they’ll at any time ship their funds again to the vault or a safe chilly storage pockets, and after the timelock the person can freely withdraw the funds to the vacation spot they selected when starting the withdrawal course of. These are the solely two methods bitcoin despatched to the vault script will be spent.
Explaining the complete mechanics of how that is completed is actually an article in itself, so I’m going to do one thing I normally don’t and hand waive this away as “magic.” (Defined right here by Andrew Poelstra) What this “magic” permits you to do, by creating non-standard Schnorr signatures and with the assistance of OP_CAT, is to construct the transaction the signature verify is in opposition to on the script stack. This allows you to implement that sure components of the transaction are precisely as outlined forward of time. It additionally permits you to put the output from a earlier transaction on the stack within the technique of constructing the transaction spending it, that means you may examine outputs from the spending transaction in opposition to outputs from the earlier transaction. This lets you assure by evaluating them that sure components of the earlier transaction’s outputs match sure components of the brand new outputs. I.e. the script, or an quantity. So you may “carry ahead” components of the previous outputs into the brand new ones, and implement that.
One thing else you are able to do with OP_CAT, which didn’t want Rijndael tinkering and experimenting with to show, is confirm merkle tree branches. As a result of you may CAT stack gadgets collectively, and Bitcoin already helps hashing information on the stack, you may slowly construct up a merkle tree root from a leaf node with the inside nodes. Hash two items collectively to get one hash, hash that with the pair hash, and so forth. Finally you get the foundation hash on the stack. You’ll be able to then examine it with OP_EQUAL in opposition to a predefined root hash within the locking script.
Unilateral Withdrawal
These two constructing blocks are sufficient to facilitate a unilateral withdrawal mechanism from a bunch shared UTXO. A merkle root will be embedded in a transaction utilizing OP_RETURN or one other mechanism that commits to a leaf node for every person. The UTXO script will be structured in order that any person with a stability can try and withdraw it. To take action they would supply the merkle department committing to the quantity they’re entitled to, the authorization proof corresponding to a public key to verify a signature in opposition to, and assemble the transaction on the stack to confirm the suitable situations are met.
Much like Rijndael’s OP_CAT vault, this withdrawal transaction would perform as a staging level. Person funds can be restricted by a timelock, and they’d not be able to finishing the withdrawal till it expires. At any time earlier than the timelock expires, another person can create a fraud proof to cease the withdrawal and shove funds again into the group UTXO script. They will do that due to OP_CAT’s capability to confirm merkle timber. If somebody has used a selected merkle department to withdraw funds from the UTXO earlier than, then that was included in a block someplace. By establishing a transaction containing the SPV proof of that transaction inside an precise block, which might use OP_LESSTHANOREQUAL to confirm the blockheader meets some minimal problem, they’ll show on the stack that the merkle department was used earlier than. This permits duplicate withdrawals to be prevented.
Along with this, as a result of you need to use the “CAT on the stack” trick to make sure particular items of a earlier transaction have to be included within the subsequent, you may assure that the present merkle root is carried ahead into the subsequent transaction after a profitable withdrawal. You too can assure that change from the withdrawal goes again into the group sharing script. This ensures that after one person withdraws their funds, the change UTXO is locked with a script that permits any remaining person to withdraw, and so forth. Any person can unilaterally withdraw their funds at any time in any order, with the assure that the rest of funds are nonetheless accessible to the remainder of the customers.
The VM Half
Readers must be acquainted with the fundamental thought of BitVM. You’ll be able to take an arbitrary computation and break it up into every of its constituent items and embed them in a big taproot tree, turning that computation right into a forwards and backwards problem/response recreation. This lets you lock bitcoin with extra difficult situations than is instantly supported by bitcoin script itself. The one actual shortcoming is the necessity to craft an enormous quantity of pre-signed transactions to facilitate this.
The requirement to make use of pre-signed transactions is in order that within the problem/response dynamic, you may assure that cash are spent again into the big taproot tree encoding it until an exit situation in some way is reached. OP_CAT and the flexibility to “carry ahead” information from earlier transactions permits you to assure that with no need pre-signed transactions.
So not solely does this scheme enable any person to unilaterally exit on their very own, it additionally permits locking situations supported by a second layer that aren’t supported by Bitcoin script to truly be enforced within the withdrawal course of. I.e. if some cash have been encumbered by a wise contract the bottom layer doesn’t perceive, after which withdrawn from the second layer, these extra difficult situations may nonetheless be settled accurately on the bottom layer because the cash are withdrawn.
The Lacking Piece
One factor that OP_CAT doesn’t allow is updating a merkle tree root representing person balances off-chain verifiably. It could actually allow an already dedicated state to facilitate unilateral withdrawals, however that’s as a result of an entire part of the tree is definitely put on-chain and verified. To replace that root off-chain by definition means you aren’t placing the info on-chain. This represents an issue. There is no such thing as a means with simply CAT to effectively confirm that every one adjustments to the merkle tree have been approved correctly by the related customers.
Somebody(s) must be trusted, and by the character of issues able to spending the UTXO nonetheless and wherever they need, to effectively change an previous state root with a brand new one to symbolize all off-chain stability adjustments. A brand new opcode along with OP_CAT, corresponding to OP_ZKVERIFY, can be wanted to do that in a trustless method.
This wouldn’t be the tip of the world with out OP_ZKVERIFY although. The entity updating the merkle root for off-chain transfers might be an n-of-n multisig, with 100% of the members required to log out on any root adjustments. This boils right down to the identical belief mannequin as BitVM primarily based pegs, the place so long as a single trustworthy participant exists, nobody’s funds will be stolen. It’s a stark enchancment over present BitVM designs nonetheless on the subject of the withdrawal course of.
In BitVM pegs, customers would not have a unilateral withdrawal mechanism. Peg operators have to be trusted to satisfy person withdrawals, realizing that they’ll declare again funds they’ve spent doing so comparatively trustlessly from the BitVM peg. Whereas the incentives of this are very stable, it nonetheless does require customers primarily getting permission from another person to exit the system, they can’t do it on their very own. With CatVM, customers can declare again their funds unilaterally, and an operator just isn’t required to entrance their very own liquidity to course of withdrawals.
Wrapping Up
Total, the design is incomplete when it comes to building. This isn’t one thing I’d name a Layer 2 in and of itself. It’s the core of 1, the mechanism and construction for the way funds are locked right into a Layer 2, and the method for the way customers can withdraw their funds. It undoubtedly has a variety of flexibility and usefulness to it.
Within the worst case state of affairs, customers don’t want anybody’s permission to securely declare their funds again on-chain. It additionally permits extra versatile programmability of funds, whereas nonetheless carrying the enforcement of these situations to the bottom layer within the occasion of worst case unilateral exits. If someday we do ultimately get one thing like OP_ZKVERIFY, the off-chain state development can turn out to be an really trustless course of.
I don’t count on any concrete demos within the close to future, however it undoubtedly is a sound thought in my view, and one thing value contemplating. It additionally reveals that the wizards are doing somewhat extra than simply pumping silly jpegs.