Analysis of the Best Mechanism for Asset Delegation Models on Bitcoin

Preface

Transaction is the core of web3, and attention is its most valuable resource. Price is the starting point of people's attention, while value is the result of time accumulation.

More than a month has passed since the Bitcoin halving event, and the highly anticipated Runes protocol has also been running for a month. During this period, more than ten代打 platforms and trading markets have emerged. On the day of the halving, the代打 fee for a single Runes asset even exceeded 100 dollars.

This article will take Runes assets as an example to explore the best mechanism for asset proxying (etching) models on Bitcoin.

1. Runes Substitute Platform GAS Ranking Analysis

According to the analysis of multiple platforms, the core conclusions are as follows:

1. Gas cost ranking: Split + Chain scheme < Chain < Split < Single打
2. Degree of centralization: Chain (no intermediate address) < Split (no intermediate address) < Chain (with intermediate address) < Split (with intermediate address)
3. Asset aggregation effect: chain > split + chain > split
4. Batch on-chain speed: Split = Split + Chain > Chain

1.1 Overview of Runes Etching Mechanism

Runes uses etching technology to record information in the op-return field of Bitcoin UTXOs. This method has been supported since the 2014 Bitcoin Core version 0.9, creating a verifiable but non-consumable output type that allows data to be permanently stored on the blockchain.

In the Bitcoin block explorer, the op-return information accompanying transactions can be easily viewed. This information, once decoded, is typically presented in JSON format and includes relevant details about the deployment, minting, and issuance of Runes assets.

The代打 mechanism of Runes can be summarized as follows: a transaction can only代打 one asset. The transaction cost mainly reflects the size of the on-chain data. Therefore, the optimal代打 platform design should minimize the number of UTXOs in the transaction.

1.2 Split Model

The split model first conducts a transaction during the boosting process, dividing the funds into multiple sub-transactions, with each sub-transaction then proceeding to asset minting.

Taking a certain platform as an example, the execution process is as follows:

1. The first transaction estimates the transaction fee for each sub-transaction, reserving 546 satoshis (a common dust value in Bitcoin) plus the transaction fee amount, and splits multiple UTXOs to a new address.
2. The second transaction transfers from the new address back to the user's address, completing the task, and the user receives Runes assets.

The main problem with this model is:

• A split transaction needs to be conducted first.
• Users receive a decentralized UTXO
• Large transactions may require additional merging operations, increasing costs

1.3 Chain Mode

The chain mode is similar to a continuous trading structure, where each transaction consumes the previous transaction that is still in the memory pool.

The characteristics of this model are:

• The first transaction incurs a platform fee
• Subsequent transaction loop processing, with a smaller amount of data
• There may be on-chain efficiency limitations (restricted by the anti-DOS attack mechanism of Bitcoin nodes)

2. Runes Best Play Model: Split + Chain

The currently ideal solution is a split + chain model. This model has the following advantages:

1. When splitting, it is equivalent to marking an asset for the user.
2. When the number of mints is within 25 times, execute the minting after splitting out enough chain minting gas.
3. When the number of minting exceeds 25 times, execute the minting after splitting out the required gas for multiple chain types.

Although this model has a basic fee not lower than pure chain, it can achieve large-scale minting, and the on-chain efficiency can complete the minting within 2 blocks.

The Importance of On-chain Efficiency 2.1

Bitcoin nodes have mechanisms to prevent DoS attacks, limiting the consumption of a single UTXO's vout and its consumption chain to a maximum of 25 transactions in the memory pool. This is why large-scale minting often uses intermediary addresses.

The split model can be placed in the memory pool indefinitely after the split transaction is on-chain (because the parent transaction is no longer in the memory pool, and the vout of each UTXO is calculated independently with a limit of 25).

2.2 BTC fee optimization rate comparison

Taking the Taproot address as an example, we can calculate the gas optimization rate of different models:

• Chain batch minting of 10 transactions, cost approximately 1310 vsize

• Split a batch minting of 10 transactions, with a cost of about 1697 vsize

• gas optimization rate: 22.8%

• Chain batch minting of 20 transactions, with a cost of about 2620 vsize

• Split batch minting of 20 transactions, cost approximately 3437 vsize

• gas optimization rate: 23.8%

This seemingly minor optimization could lead to significant cost savings in high-frequency trading.

3. Summary

Since the issuance of the Runes asset agreement a month ago, it has not reached the expected market value, but it has exposed the imperfect issues of the two core infrastructures in the ecosystem:代打 and the market. Currently, the platform either charges too high a fee or lacks complete functionality, making it difficult to meet user needs.

In the future, directly running open-source code may be an effective way to avoid high代打 fees. For capable users, this not only reduces costs but may also bring more trading opportunities.

With the development of the ecosystem, we look forward to seeing more innovative代打 models and trading market solutions to promote the prosperous development of Bitcoin's asset ecosystem.