Fractal Bitcoin rekindles the heat of BTC ecosystem. What is the value of CAT20?

Author: Climber, Golden Finance

The Fractal Bitcoin project launched by UniSat recently has become the focus of community attention. As a Bitcoin expansion solution, its ecological projects and tokens have also been explored and sought after by early investors, such as FLUX, PizzaSwap, Wukong, etc. The hottest new project in the past two days is the CAT20 token protocol, which also helps Fractal Bitcoin bring traffic to the BTC ecosystem again.

CAT20 is a token protocol launched by the CAT Protocol, a fractal network project on Fractal. As soon as it came out, the community rushed to mint it. When the interaction density was the highest, the main network transaction fees of Fractal Bitcoin soared, and the fees of multiple blocks once exceeded 5,000 Sat/byte.

Currently, the total amount of tokens set by CAT Protocol has been almost exhausted, and it took only two days from the explosion to the exhaustion. However, community members have different opinions on this new project. Some believe that CAT will have high returns, while others say that it will not have much value like the previous flood of runes and inscriptions.

Mysterious but popular experimental project

Since September 12, the CAT20 protocol has been widely discussed on social platforms, with various publicity and tutorials. In particular, UniSat added a "CAT20" column on the Fractal Bitcoin block browser, which further boosted the enthusiasm for Cat20 mint and the surge in on-chain Gas.

CAT Protocol sets the total number of tokens at 21 million. The tokens that were originally planned to be mined in three to four days were also minted ahead of schedule due to the popularity and the increase in new platforms. Currently, there are more than 40,000 CAT holders, and multiple platforms support data query functions such as Cat20 progress and holders.

Previously, community members calculated that the Fractal network fee level was around 1800-2000 during the peak of mint, and the cost of minting one was about 2 USDT. But it still couldn't stop the enthusiasm of the participants, which indirectly caused the price of Fractal Bitcoin's project FB to rise from US$20 to around US$35.

So what exactly is CAT Protocol that has caused huge FOMO among the community?

According to the official website of CAT Protocol, it is a new UTXO-based Bitcoin token protocol launched on Fractal Bitcoin, called Covenant Attested Token (CAT). The protocol is verified by miners and uses smart contracts to manage the minting and transfer of tokens. Compared with all existing token protocols on Bitcoin, it is only enforced by Bitcoin scripts on Layer 1.

In the context of Bitcoin, Covenant refers to a mechanism that can impose restrictions on how future transactions involving a specific set of currencies are used. Covenants are essentially restrictions or rules embedded in Bitcoin transactions that are designed to control the transfer or use conditions of currencies. For example, they can limit the addresses to which currencies can be sent, or require certain scripts to be included in future transactions.

A straightforward way to add Covenant is to introduce new opcodes in BIP 119, such as OP_CHECKTEMPLATEVERIFY (CTV).

CAT Protocol key features include:

No Indexer Required: The token’s rule set is guaranteed by Bitcoin consensus. Both token data and logic reside on-chain. It does not rely on any off-chain third party (such as an Indexer) to operate. There is no risk of Indexer inconsistency, and CAT tokens inherit the native Bitcoin proof-of-work security.

Modularity: Because CAT tokens can be verified in scripts, they can be used in other smart contracts and combined into more complex and interconnected decentralized applications, such as automated market makers (AMMs), lending, and staking. The modularity and composability of CAT tokens provide a powerful and versatile new building block for expanding the scope of Bitcoin’s applications.

Programmable Minting: Token minting rules are not enforced by Indexers, but rather by minting smart contracts. These customizable and flexible contracts allow token issuers to specify arbitrary minting rules, including open minting. Over-minted transactions will be rejected directly by the network, rather than rejected at the Indexer, and will not be mined.

Cross-chain interoperability: The CAT protocol allows for trustless bridging of assets between different blockchains, enabling applications to run across multiple blockchains.

SPV Compatible: CAT tokens support Simplified Payment Verification (SPV). Light clients (such as mobile phones) can independently verify the authenticity of tokens without trusting any central server. Similar to Bitcoin, token transactions deep enough in the blockchain can be considered valid by light clients.

The CAT protocol supports both fungible tokens (called the CAT20 standard) and non-fungible tokens (called the CAT721 standard). The technology developed here is general and can be applied to use cases beyond tokens.

As of this writing, there is still no more information about the background team of CAT Protocol, but some community members have found a high degree of similarity between CAT Protocol and the official website documents of the OP_CAT project team sCrypt Official.

However, the CAT Protocol project has already stated on its official website that the CAT protocol is an experimental project and there is no guarantee that the tokens created using the protocol have any value or utility. Users should act with caution and conduct their own research before using it.

Over-the-counter transactions are active, and the community has different views

For the explosion of CAT-20, community members have very different views. Some regard its token CAT as the next ORDI, while others believe that its value is not high and is just to make retail investors contribute to FB.

A community member @Di2023D posted a picture showing that CAT's current over-the-counter trading is very active, which is somewhat similar to the previous ORDI.

A foreign KOL @Pentaeth said that CAT's over-the-counter price continues to rise and is currently close to $3 per coin. He is optimistic about the future of CAT and believes that it has a potential of 100 times.

Currently, there are many opinions in the community that share the same views as the above two people, but there are still KOLs who are not optimistic about the future development of CAT.

KOL@jacksu88 said that the so-called first token CAT on the Fractal Bitcoin network is likely to end up like the Atom and Pipe protocols that no one has taken over. It will face a situation where no one has taken over. Some people have already started to rush CAT before it was officially minted, and many later participants were affected by fomo. Projects controlled by bookmakers are not fair.

KOL@Greta0086 said that the Bitcoin ecosystem is basically a Chinese project, and the Chinese version of the Fractal Ecosystem is not much different from other Chinese versions, so there won't be many people who will take over.

Another KOL @123123crypto believes that CAT Protocol is attached to a copy-paste fork chain of Bitcoin, Fractal Bitcoin, but it has no mainstream consensus and no representative projects. It is unlikely to achieve much in the future. Its status is equivalent to Ethreum classic, and its future development is limited. And CAT20 is attached to such a fork chain with no three things, and its current market value is 10 million US dollars, which is obviously not reasonable.

Through the analysis of the above community members, it can be seen that CAT Protocol does have many doubts. If it is not an early participant, then subsequent investors need to pay more attention to project risks.

Summary

The explosion of CAT20 can be said to have left many people too late to react. They were thrown off the bus while they were still exploring the Mint method and hesitating about the Gas fee. Later comers can only obtain it from the outside at a higher cost. Despite many doubts and bearish views on CAT Protocol in the community, the enthusiasm of participants cannot be resisted. From the early scientists' hand-made Mint website to the frequent emergence of proxy platforms, it proves that the project has once again attracted a huge amount of attention to the Bitcoin ecosystem.