ICP is the perfect infrastructure to build with and on Bitcoin. It runs canister smart contracts with unmatched capabilities. Each canister can act as a Bitcoin wallet, securely requesting signatures from ICP's threshold signature system supporting ECDSA and soon, Schnorr, which will allow more use cases related to Ordinal Inscriptions, BRC-20, Runes, Atomicals, Taproot Assets, and more. In addition, canister smart contracts have access to the full Bitcoin UTXO set and the Bitcoin block header chain, allowing light client verification of transactions and witness data.
We encourage builders and entrepreneurs who are excited to build the Bitcoin economy to explore ICP and apply for a grant. The following examples will give you an idea of what's possible and what we think would be useful, but it's far from a comprehensive list. The possibilities are endless.
Request for Proposal (RFP) Categories
Novel Protocols and Applications
We are already seeing many new and exciting applications being built with and for Bitcoin that use ICP as their substrate:
ckBTC - A fast, cheap, and scalable payment system built on Bitcoin that seamlessly plugs into the ICP DeFi ecosystem.
Bioniq - An ordinals launchpad and marketplace that supports reserved ordinals, allowing them to be traded quickly and inexpensively on ICP before being inscribed to Bitcoin.
Helix Markets - A non-custodial order book exchange built on ICP supporting BTC.
Omnity - An interoperability protocol built on ICP with support for Runes.
Dopamine - Brings crypto-economic security from BTC to services in exchange for staking yield.
We are looking for more innovative protocols and applications that unleash innovation on Bitcoin and can unlock the productive use of BTC and other Bitcoin-based assets.
Infrastructure
Decentralized Ordinals and Metaprotocol Indexer
To create fully decentralized marketplaces and DeFi infrastructure for Ordinals, Runes, BRC-20, and other meta-protocols, canister smart contracts need to be aware that they are in control of these assets. Therefore, indexers are needed. The eventual goal is to have indexers running on ICP, akin to porting ord to ICP. However, even smaller steps can already help:
A canister could use HTTPS outcalls to fetch data on-demand from multiple off-chain indexers, similar to how the Exchange Rate Canister or the EVM RPC canister works. A starting point could be the Ordinals Canister.
The ICP Bitcoin API will soon be extended to serve block headers. This will enable the verification that a certain transaction is part of the Bitcoin Blockchain using the data returned by gettxoutproof.
Launchpads
Launchpads on ICP allow bringing interesting capabilities to the issuance of assets on Bitcoin. Bioniq is pioneering this approach with reserved Ordinals that can be traded on ICP before being inscribed on Bitcoin. Similarly, we expect launchpads for fungible assets where minting/trading happens on ICP first, and only when a certain valuation is reached does the asset get created on Bitcoin.
Upgrading Digital Collectibles
Bitcoin is the most exclusive substrate for digital collectibles. Hence, we expect an increasing number of digital collectibles to transition from other chains to the OG chain. ICP provides the perfect infrastructure to enable these upgrades.
Trust-minimized Meta-protocol Asset Bridges
ckBTC is already a trust-minimized smart contract-controlled bridge that brings BTC to ICP. Similarly, we need more trust-minimized smart contract-controlled bridges to bring Ordinals, Runes, BRC-20, and all the other assets that are being issued to ICP.
Furthermore, ICP can be used as the hub to bring those assets to other chains, whether other L1 or future Bitcoin L2s.
Fast ckBTC On-ramp
Transitioning from BTC to ckBTC currently requires 12 confirmations on the Bitcoin blockchain, roughly amounting to around 2 hours. This duration is prohibitive for users looking to purchase an Ordinal on Bioniq. The 12 confirmations are necessary because the ckBTC minter must be extremely certain that the blockchain will not be reorganized and that the deposited Bitcoins are truly owned and controlled by the ckBTC system. Otherwise, ckBTC might lose its property of being 1:1 backed by BTC. However, a fast path could be devised where current ckBTC holders sell their ckBTC for a slightly higher amount of ckBTC that is not yet unlocked, i.e., has only a few confirmations.
Lightning Integration
We are interested in further exploring the integration between the Lightning Network and ICP. Potential projects could include:
On-boarding and off-boarding from/to Lightning to ckBTC.
A secure programmable signer for Lightning nodes.
Secure Taproot asset issuance.
Timestamping Service
The Bitcoin Blockchain is the world's most secure digital timestamping service, with many projects leveraging this capability over the years (e.g., OpenTimestamps, which is perhaps the original). A timestamping service that aggregates hashes over specific time intervals and commits them to Bitcoin could add Bitcoin's security to applications on ICP and other chains. The Babylon docs offer a comprehensive overview of this use case in the context of Proof-of-Stake chains.
Frameworks and Infrastructure to Build Bitcoin L2s
Current Bitcoin L2s require trust-minimized asset bridges to bring BTC and other assets issued on Bitcoin to their chains. Chain signatures and HTTPS outcalls facilitate this. Moreover, the Sequencer and/or Data Availability layer could be implemented on ICP, and the L2 state could be directly committed to Bitcoin using the Timestamping Service mentioned above.
BTC Governance and DAOs
There has been limited experimentation with DAOs in the Bitcoin space. We aim to encourage more innovation in this area, with first examples beginning to emerge in the ecosystem.
Developer Experience
Building on Bitcoin, even with ICP, presents challenges. We are therefore interested in libraries, SDKs, and tools that simplify working with Bitcoin for both ICP and Bitcoin developers.
Overview
ICP is the perfect infrastructure to build with and on Bitcoin. It runs canister smart contracts with unmatched capabilities. Each canister can act as a Bitcoin wallet, securely requesting signatures from ICP's threshold signature system supporting ECDSA and soon, Schnorr, which will allow more use cases related to Ordinal Inscriptions, BRC-20, Runes, Atomicals, Taproot Assets, and more. In addition, canister smart contracts have access to the full Bitcoin UTXO set and the Bitcoin block header chain, allowing light client verification of transactions and witness data.
We encourage builders and entrepreneurs who are excited to build the Bitcoin economy to explore ICP and apply for a grant. The following examples will give you an idea of what's possible and what we think would be useful, but it's far from a comprehensive list. The possibilities are endless.
Request for Proposal (RFP) Categories
Novel Protocols and Applications
We are already seeing many new and exciting applications being built with and for Bitcoin that use ICP as their substrate:
We are looking for more innovative protocols and applications that unleash innovation on Bitcoin and can unlock the productive use of BTC and other Bitcoin-based assets.
Infrastructure
Decentralized Ordinals and Metaprotocol Indexer
To create fully decentralized marketplaces and DeFi infrastructure for Ordinals, Runes, BRC-20, and other meta-protocols, canister smart contracts need to be aware that they are in control of these assets. Therefore, indexers are needed. The eventual goal is to have indexers running on ICP, akin to porting
ordto ICP. However, even smaller steps can already help:A canister could use HTTPS outcalls to fetch data on-demand from multiple off-chain indexers, similar to how the Exchange Rate Canister or the EVM RPC canister works. A starting point could be the Ordinals Canister.
The ICP Bitcoin API will soon be extended to serve block headers. This will enable the verification that a certain transaction is part of the Bitcoin Blockchain using the data returned by
gettxoutproof.Launchpads
Launchpads on ICP allow bringing interesting capabilities to the issuance of assets on Bitcoin. Bioniq is pioneering this approach with reserved Ordinals that can be traded on ICP before being inscribed on Bitcoin. Similarly, we expect launchpads for fungible assets where minting/trading happens on ICP first, and only when a certain valuation is reached does the asset get created on Bitcoin.
Upgrading Digital Collectibles
Bitcoin is the most exclusive substrate for digital collectibles. Hence, we expect an increasing number of digital collectibles to transition from other chains to the OG chain. ICP provides the perfect infrastructure to enable these upgrades.
Trust-minimized Meta-protocol Asset Bridges
ckBTC is already a trust-minimized smart contract-controlled bridge that brings BTC to ICP. Similarly, we need more trust-minimized smart contract-controlled bridges to bring Ordinals, Runes, BRC-20, and all the other assets that are being issued to ICP.
Furthermore, ICP can be used as the hub to bring those assets to other chains, whether other L1 or future Bitcoin L2s.
Fast ckBTC On-ramp
Transitioning from BTC to ckBTC currently requires 12 confirmations on the Bitcoin blockchain, roughly amounting to around 2 hours. This duration is prohibitive for users looking to purchase an Ordinal on Bioniq. The 12 confirmations are necessary because the ckBTC minter must be extremely certain that the blockchain will not be reorganized and that the deposited Bitcoins are truly owned and controlled by the ckBTC system. Otherwise, ckBTC might lose its property of being 1:1 backed by BTC. However, a fast path could be devised where current ckBTC holders sell their ckBTC for a slightly higher amount of ckBTC that is not yet unlocked, i.e., has only a few confirmations.
Lightning Integration
We are interested in further exploring the integration between the Lightning Network and ICP. Potential projects could include:
Timestamping Service
The Bitcoin Blockchain is the world's most secure digital timestamping service, with many projects leveraging this capability over the years (e.g., OpenTimestamps, which is perhaps the original). A timestamping service that aggregates hashes over specific time intervals and commits them to Bitcoin could add Bitcoin's security to applications on ICP and other chains. The Babylon docs offer a comprehensive overview of this use case in the context of Proof-of-Stake chains.
Frameworks and Infrastructure to Build Bitcoin L2s
Current Bitcoin L2s require trust-minimized asset bridges to bring BTC and other assets issued on Bitcoin to their chains. Chain signatures and HTTPS outcalls facilitate this. Moreover, the Sequencer and/or Data Availability layer could be implemented on ICP, and the L2 state could be directly committed to Bitcoin using the Timestamping Service mentioned above.
BTC Governance and DAOs
There has been limited experimentation with DAOs in the Bitcoin space. We aim to encourage more innovation in this area, with first examples beginning to emerge in the ecosystem.
Developer Experience
Building on Bitcoin, even with ICP, presents challenges. We are therefore interested in libraries, SDKs, and tools that simplify working with Bitcoin for both ICP and Bitcoin developers.
How to Apply?
Please submit your application at https://dfinity.org/grants, mentioning RFP-8 in the application.
References