New Bitcoin Smart Contracts Solution: Similarities and Differences between OP_NET and Arch

Recently, two smart contract implementation solutions on the Bitcoin mainnet, OP_NET and Arch, have sparked widespread discussion. Despite their similar names, OP_NET and the Bitcoin opcode OP_CAT are fundamentally different.

OP_CAT is a Bitcoin opcode that was removed by Satoshi Nakamoto, and its function is to concatenate strings. Currently, the proposal to restore OP_CAT is still in its early stages, and its specific application scenarios are not yet clear. In contrast, OP_NET falls under the "protocol" category similar to runes and BRC-20.

OP_NET Overview

The technical framework of OP_NET includes two main parts: the Bitcoin mainnet as the "action initiation layer" and "final confirmation layer", and the "execution layer" composed of OP_VM and OP_NET nodes.

The workflow of OP_NET is as follows:

1. The user initiates a transaction on the Bitcoin mainnet, which includes the "BSI" identifier.
2. OP_VM executes smart contracts and updates the state.
3. The OP_NET node confirms the status and provides it to the application.
4. The application submits the results back to the Bitcoin mainnet.

OP_NET adopts the "burn Bitcoin" mechanism, where the transaction fees include the basic network fee and the OP_NET transaction fee. The latter consists of the execution fee and the priority fee, both paid in Bitcoin. The portion exceeding 0.0025 Bitcoin will be "burned", and the remaining part will be distributed as node rewards.

It is worth noting that OP_NET also incorporates the two standards OP_20 and OP_721, reflecting the project's inclination towards the style of "new protocols, new assets."

Arch Analysis

Arch is positioned as "Bitcoin Layer 1.5", aiming to build a smart contracts layer based on the Bitcoin mainnet. The project has secured $7 million in seed round financing, with participation from several well-known institutions.

The workflow of Arch includes:

1. The user initiates a transaction from the Bitcoin mainnet.
2. Arch nodes process and verify transactions.
3. The leader node is responsible for establishing the Arch network block.
4. The final confirmed transaction is submitted back to the Bitcoin mainnet.

Arch adopts the "FROST + ROAST" signature scheme, ensuring network stability as long as 51% of network members cooperate honestly. Although Arch has its own token as Gas fees, users can still pay with Bitcoin, and the backend will perform the fee conversion.

Comparison and Outlook

OP_NET and Arch have similarities in their technical implementations, both viewing the Bitcoin mainnet as the "initiation point" and "confirmation layer." However, their positions are different: OP_NET is more like a "protocol," while Arch is referred to as "Bitcoin Layer 1.5."

Both projects face the challenge of long block times on the Bitcoin mainnet, which may limit the efficiency of their dApps. Nevertheless, these explorations are crucial for the development of the Bitcoin ecosystem.

The Arch project plans to conduct a token generation event (TGE) in the first quarter of next year, and investors can pay attention to related testing activities and dApps based on Arch. In contrast, OP_NET currently lacks obvious participation opportunities, and its success may depend on whether it can foster a blockbuster coin.