Taproot Upgrade: OP_NET Develops Bitcoin by Launching DeFi and Smart Contract Solution

Bittime - Bitcoin, as the dominant blockchain, has long been envisioned to support decentralized finance (DeFi). However, until now, smart contracts have not been a native part of the Bitcoin network. 

In this regard, a group of developers will launch the OP_NET testnet on Wednesday, which is claimed to bring these programming features to Bitcoin.

Tapscript Utilization and Purpose of OP_NET

OP_NET leverages the Tapscript component of the Bitcoin Taproot upgrade, which also allows for Ordinals and Runes. According to Chad Master, the pseudonymous co-founder of OP_NET, their goal is to build a permissionless meta-protocol system that allows anyone to deploy decentralized applications and smart contracts on the Bitcoin network.

“We want to really see DeFi on Bitcoin at full scale,” Chad Master told Decrypt, providing an overview of the testnet launch and noting that the mainnet will be online at the end of September.

DeFi on Bitcoin with OP_NET

Bitcoin has always been known for its excellent security and strong decentralization. However, in terms of programming capabilities such as smart contracts, Bitcoin lags behind other blockchains such as Ethereum. 

With the launch of OP_NET, developers hope to address this gap. OP_NET leverages Tapscript from Bitcoin's Taproot upgrade, enabling the creation of Ordinals, Runes, and now, smart contracts on the Bitcoin network.

Chad Master explains that their ultimate goal is to create a permissionless meta-protocol system, allowing anyone to develop and run decentralized applications and smart contracts on Bitcoin. “We want to really see DeFi on Bitcoin at full scale,” Chad said.

Read also: Bitcoin cs Drops, This is the Right Time to Buy Crypto according to the Crypto Academy

Benefits of OP_NET for Bitcoin

OP_NET uses WebAssembly (WASM), which allows smart contracts to be written in a variety of languages, including AssemblyScript/Typescript, Rust, Python, and C++. Additionally, according to the OP_NET light paper, only Bitcoin is needed to pay transaction fees, not sidechain tokens.

OP_NET transactions sent to the Bitcoin network are labeled in an arbitrary data field with the string “BSI,” indicating that an OP_NET transaction has been initiated. This transaction is sent to a non-spendable Bitcoin address, which has been converted into a contract address. These transactions are then processed in the OP_NET virtual machine (OP_VM), and contracts are updated as needed.

Advantages of Bitcoin Virtual Machine

The virtual machine used by OP_NET, explained by Chad Master, functions like the Ethereum Virtual Machine, but for Bitcoin. “It's basically a Bitcoin Virtual Machine,” Chad said. “While the term has been used by layer-2 solutions, this is an actual implementation of that concept."

Conclusion

With the launch of OP_NET, Bitcoin not only strengthens its position as a secure and decentralized blockchain, but also takes a big step into the world of DeFi and smart contracts. By leveraging Taproot and OP_NET innovation, the future of decentralized finance on Bitcoin looks brighter than ever.

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