PIPE: The First UTXO Rune Protocol

Web3布道小生｜2024-01-22 19:30

Frequently mentioned by Binance and OKX, where exactly is the ceiling for PIPE； Pipe Protocol: The premier UTXO rune protocol； It's an innovative protocol entirely based on the Bitcoin main chain, at the same level as the ordinals protocol.

【This article is from @GloryYeh, thanks to @DRUG for the hard work in translation.】

一、Frequently mentioned by Binance and OKX, where exactly is the ceiling for PIPE?

(1)On 2023-11-17, when OKX joked about the abundance of inscription protocols, PIPE was notably listed first.

(2)On 2023-11-25, Binance, while introducing the Bitcoin ecosystem, highlighted the PIPE protocol:

(3)On 2024-01-03, OKX, while discussing runes, once again mentioned PIPE:

Why are the major players so eagerly flocking to PIPE? What makes PIPE so revered?

二、PIPE in TTP, the Premier UTXO Rune Protocol

When it comes to PIPE, it's essential to understand the TTP ecosystem: TTP (Trac-Tap-Pipe), a re-venture by the original Ordinals indexing team, has introduced new key members and made significant improvements to the original protocol. It has received institutional funding of $4.2 million led by Sora Ventures. This positions TTP as one of the few teams in the inscription ecosystem to secure such funding.

The TTP's positioning and layout are comprehensive and in-depth:

Trac Core primarily focuses on indexer and oracle functionalities;

Trac is the core infrastructure for data security and accuracy, essential for all chains and inscriptions.

Tap Protocol: The liquidity engine of the Bitcoin ecosystem

Tap is Ordinals' multi-asset meta-protocol (an enhanced version of BRC20), allowing complex financial operations directly on the Bitcoin blockchain. It further releases the liquidity of assets on ordinals, introducing DeFi and NFT tokenization functions.

Pipe Protocol: The premier UTXO rune protocol

Utilizing Bitcoin's basic UTXO structure, it introduces advanced functions of digital assets and NFTs into Bitcoin. This substantially reduces inscription garbage, improves transaction efficiency, lowers transaction costs, and prevents double-spending. It's the most crucial direction for existing protocol improvements (an independent protocol that surpasses Ordinals in performance) and the focal point for empowering the entire ecosystem.

The Pipe protocol was released as early as October 2023, meaning Pipe is both the native token standard for UTXO and the first protocol to implement the rune concept.

三、What is UTXO?

UTXO (Unspent Transaction Output) architecture has always been considered elegant and straightforward. Although there are many explanations and concepts of UTXO, they are mostly hard to understand. In fact, it can be explained clearly with a diagram:

Suppose Li Lei has $100 and plans to give. $80 to Han Meimei. There are two ways to conduct this transaction:

UTXO can be simply understood as being similar to cash transactions. Li Lei has a 100-unit UTXO, which cannot be subdivided, just like you cannot tear a banknote for use.

Therefore, the entire amount must be given to Han Meimei first, who then gives 20 units as change back to Li Lei.

After the transaction, there are two UTXOs: one is Han Meimei's 80 units, and the other is the 20 units returned to Li Lei.

四、Advantages and Potential of PIPE

After understanding UTXO, let's take a comprehensive look at the PIPE protocol:

(1)Features

It's an innovative protocol entirely based on the Bitcoin main chain, at the same level as the ordinals protocol.

Integrates the ideas of ordinals protocol and runes.

Perfectly inherits Bitcoin's UTXO features, preventing double-spending and enhancing protocol reliability.

(2)Advantages

Significantly reduces the garbage generated by inscriptions.

Enables rapid issuance of memes and natively supports splitting into 8 decimal places.

Eliminates the need for inscription, addressing the congestion on the Bitcoin chain caused by repeated ordinals inscriptions, saving transaction fees and ensuring network fluidity.