TL;DR Due to the properties of OP_CTV which allow the exact collateral UTXO to be ignored during the setup ceremony, the BitVM bridge can achieve significantly improved capital efficiency. A demo of OP_CTV has been successfully completed. Through this demonstration, you can gain a deeper understanding of how the collateral mechanism operates within the system. Original desgin In the original BitVM bridge design, collateral must be locked during the presigning ceremony to ensure that, in the event of malicious behavior by the operator, the collateral can be slashed as a penalty. As illustrated in the figure below, each Kick Off transaction requires a collateral amount of 2 BTC to be deposited. If the operator acts dishonestly, this 2 BTC collateral will be forfeited through the Disprove transaction. Conversely, if the operator behaves honestly, the collateral will be returned via the Take1 transaction. image This approach results in extremely low capital efficiency, as the operator must prepare a separate deposit for each Kick Off transaction. For instance, if there are 10 Peg in transactions, each associated with 10 reclaimable UTXOs, the total required deposit would be 200BTC(2 BTC * 10 * 10)

Overview After extensive consideration, the opcode OP_CTV (CheckTemplateVerify) has been thoroughly studied, reviewed, and is now well understood by the Bitcoin community and its developers. As a result, Jeremy Rubin has expressed his support for a covenant upgrade plan aimed at activating OP_CTV. It is possible that developers may not have to wait much longer before this feature is officially activated. The BitVM bridge, on the other hand, seeks to establish a trust-minimized bridge system between Bitcoin and various sidechains or sidesystems. Historically, implementing covenants in Bitcoin has typically relied on mechanisms such as a presigning committee, which ensures that transactions are submitted in a predetermined manner. However, this approach often introduces trust assumptions and operational complexity. For those interested in the technical details of how the BitVM bridge works, further information can be found here. While the latest design of the BitVM bridge has undergone significant changes compared to earlier iterations, it still retains the fundamental principles and key insights necessary for its implementation. Furthermore, it can be used as a reference example to demonstrate a potential approach for implementing the BitVM bridge with the use of OP_CTV. In the end, a demo is provided for you to see how the BitVM bridge may work in practice. OP_CTV OP_CTV, also known as OP_CHECKTEMPLATEVERIFY, is a Bitcoin opcode with a straightforward yet powerful function. It verifies whether the element at the top of the stack matches the DefaultCheckTemplateVerifyHash of the transaction itself. The DefaultCheckTemplateVerifyHash represents a novel approach to computing the digest of a transaction, designed to facilitate more efficient and predictable transaction processing. This digest calculation is particularly noteworthy because it commits to specific fields of a transaction in a carefully chosen order, prioritizing fields that are least likely to change and progressing to those that are more dynamic nVersion nLockTime