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The ALKANES metaprotocol is a finely tuned WASM runtime and Rust SDK for a programmable asset class, which inherits structures and many other primitives from the runes protocol, introducing additional layers to meet the requirements of a modernized DeFi landscape. We present a design for a smart contract environment which is functional within space constraints of Bitcoin transaction structures, and the foundation for a re-imagined DeFi, purely on Bitcoin L1.
ALKANES are deployed with witness reveal payloads similar to the inscription envelope which the ordinals metaprotocol uses, as well as an OP_RETURN segment in the transaction payload, encoding one of many protocol messages which can be chained together. UTXOs are signed and created with the transaction which are referenced by the OP_RETURN segment to declare a destination for output assets on success, and then another representing failure, allowing us to gracefully handle a concept of a revert, as we are familiar with, tolerant of potential reorgs. Unlike other emerging programmable asset metaprotocols, actions can be executed against an ALKANE with a single transaction and OP_RETURN payload, without the user needing to inscribe to trigger the indexer to execute an intent. ALKANES are instantiated with a gzipped WASM file, which can be built in any language. The canonical repository for ALKANES contains everything needed to both run and index the ALKANES metaprotocol, a framework to build/deploy ALKANES smart contracts in Rust, and also a suite of standard ALKANES smart contracts and helper libraries, for developers to visit examples or quickly author applications from working templates.
ALKANES can execute up to a FUEL limit, but the costs associated with an ALKANES transaction are simply in terms of Bitcoin, on the order of transaction size, as is the case with any other Bitcoin transaction. This property of the metaprotocol we believe is paramount for a sustainable ecosystem of Bitcoin applications with greatest potential.
The addressing system in ALKANES makes use of the identifier [2, n] where n increases by 1 for every new ALKANE created via the available opcodes for deployment.
The ALKANES metaprotocol is instantiated with the creation of ALKANE at [2, 0], after which the ALKANES indexer begins to evaluate blocks for protocol messages.
This ALKANE is titled DIESEL and is designed to have the following properties:
DIESEL can be minted once per block by the first transaction evaluated to issue the mint opcode to the DIESEL contract (77) A mint of DIESEL is always in the quantity of the block reward for a given Bitcoin block. It is intended that DIESEL is minted in parity with new sats, and inherits the intrinsic economic model of Bitcoin itself as new blocks are added. On Bitcoin mainnet, DIESEL is instantiated with a supply equal to the cumulative block rewards since block 840000, the genesis block of the runes metaprotocol and the most recent halving as of this writing. DIESEL is NOT upgradeable – It’s rules are definite with the genesis of ALKANES itself DIESEL is built purely as an ALKANE, with no protocol extensions necessary to enable its function. We achieve extensibility of the asset via the featureset of ALKANES itself. DIESEL is NOT needed to interact with the ALKANES protocol. We strictly use the Bitcoin model for fees, and the economics of compute have no additional costs or beneficiaries other than the cost of the Bitcoin transaction size.
The design of DIESEL provides a mechanism by which a supply of the asset can be seeded to create a base asset for organic marketplace activity. Additionally, it provides a mechanism by which early adopters have an opportunity to participate and compete in the mempool for exposure. At some stage, mining pools will be sufficiently aware of the additional value capture available with a PoW, and include a transaction or otherwise reorder a block. As reordering for this purpose becomes mainstream, supplementary ALKANES can be deployed as additional layers to provide marketplace mechanics on Bitcoin settlement risk, restaking protocols of different forms, and other interesting mechanics which contributed to the growth of restaking protocols within classic DeFi.
ALKANES was designed by a team dedicated to the growth of open protocols, the growth of Bitcoin, and the growth of open-source at large. We expect to see a rich and diverse ecosystem that takes full advantage of the flexibility of ALKANES structures, as well as the WASM runtime which powers an ALKANE smart contract. When we can fit a WASM runtime to provide programmability on Bitcoin, we activate the full suite of open-source software within what becomes a maximally powerful asset class within the cryptocurrency arena.
For all of us who collaborated to iterate on the new generation of free finance, we continue to fight for its permanence.
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