🔥POW-20 Protocol

POW-20 protocol is an extension of BRC-20 protocol that introduces and requires proof-of-work (PoW) to mint and produce new tokens.

Introduction

Proof-of-Work is the backbone of Bitcoin (BTC) and other PoW chains like Litecoin (LTC), Doge (DOGE), Bitcoin Cash (BCH), Bitcoin SV (BSV), etc. However, derivative assets (tokens/NFTs) like BRC-20 that run on these base layers have traditionally been issued or distributed through means other than PoW. While Atomicals recently enabled a version of PoW token mining, it does so at a cost, namely understandability for the average person and a learning curve to get started. It's fairly complex if you're not a dev. It also introduces challenges for exchanges and indexers that may wish to implement them.

What is needed is something simple that "extends" what we already have with BRC-20, making it easy for users, exchanges, and indexers to get started or implement with a few lines of code.

The protocol is straight forward and should look familiar.

Deploy

{
  "p": "pow-20",
  "op": "deploy",
  "tick": "DOTI",
  "max": "21000000",
  "lim": "1000",
  "difficulty": "5",
  "startBlock": "875000"
  "dec": "8" // max 15
  "icon": "534cede12f90729d961dbdaf7dc889e9ac6567fd43759097567bca2f2791dcd8i0"
}

New Fields

  • difficulty: The number of leading zeros required in the double sha256 hash of the solution

  • startBlock: Any future block number

  • icon (optional): a reference inscriptionId or link to the icon

Mint

{
  "p": "pow-20",
  "op": "mint",
  "tick": "DOTI",
  "amt": "1000",
  "solution": "<TICK>:<BTC_ADDRESS>:<START_BLOCK_HEADER>:<NONCE>"
}

New Fields

  • solution: A unique string that is double sha256 hashed to meet the difficulty specified in the deploy inscription

A solution is composed of 4 parts delimited by a colon:

  1. TICK - The ticker symbol

  2. BTC_ADDRESS - The BTC ordinal address that the inscription is inscribed to (to prevent mempool sniping)

  3. START_BLOCK_HEADER - The future block header/hash of the startBlock specified in the deploy inscription (to prevent pre-mines)

  4. NONCE - A random nonce

Transfer

{ 
  "p": "pow-20",
  "op": "transfer",
  "tick": "DOTI",
  "amt": "500"
}

New Indexer Rules

  1. Is the address the same address found in the inscription? Must be true

  2. Does the solution contain the correct START_BLOCK_HEADER header for the startBlock found in the deploy inscription? Must be true

  3. Does the double sha256 hash of the solution meet the difficulty found in the deploy inscription? Must be true

  4. Has the solution been seen before? Must be false

Examples

Valid Deploy:

{
  "p": "pow-20",
  "op": "deploy",
  "tick": "TEST",
  "max": "21000000",
  "dec": "8", // max 15
  "lim": "1000",
  "difficulty": "3",
  "startBlock": "826728"
}

Valid Mint:

{
  "p": "pow-20",
  "op": "mint",
  "tick": "TEST",
  "amt": "1000",
  "solution": "TEST:bc1p5d7rjq7g6rdk2yhzks9smlaqtedr4dekq08ge8ztwac72sfr9rusxg3297:00000000000000000003b29163d794f519b3395338bd20420aa3772c9bbf3434:5390"
}

The double sha256 hash of the above solution produces the following hash which meets the example deployment difficulty requirement of 3: 

00050f8fa258111ce0c040baaf5b97339cc241dab85587c3e59fb5d864e53f7f

Valid Transfer:

{
  "p": "pow-20",
  "op": "transfer",
  "tick": "TEST",
  "amt": "250",
}

Invalid Mint:

{
  "p": "pow-20",
  "op": "mint",
  "tick": "TEST",
  "amt": "1000",
  "solution": "TEST:bc1p5d7rjq7g6rdk2yhzks9smlaqtedr4dekq08ge8ztwac72sfr9rusxg3297:00000000000000000003b29163d794f519b3395338bd20420aa3772c9bbf3434:1258"
}

The double sha256 hash of the above solution produces the following hash which does NOT meet the deployment difficulty requirement and is invalid:

4edd19656a5f82c771f376a3db4d641cd6a58b09a4b1db530344977045b1515d

NOTE: The above protocol applies to all layer-1 chains other than BSV which implements an sCrypt Hash-to-Mint (HTM) smart-contract for BSV-20(v2) token issuance based on provided proof-of-work.

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