Bitcoin Markets

Sprint Name: Buidl Hackathon

Sprint goal

Make bigmarket.ai work for bitcoin users. Display amount and conversions in btc. Devise a mechanism to stake using only bitcoin transactions (consider claiming in the next sprint).

Approaches;

Bitcoin staking transaction

• Option 1: Use bitcoin deposit with op_return for meta data

• Option 2: Use sBTC deposit with signed message for meta data

Option 1: Bitcoin Deposit

The problem: how to determine the validity of the bitcoin transaction in clarity while also passing the meta data needed for staking.

One option - P2TR means we can include meta data while the end user sends a standard P2WSH bitcoin commitment - allowing them to stake from any bitcoin wallet. P2TR also has the intriguing possibility of allowing users to stake with inscriptions / runes they own on layer.

However, within the hackathon time constraints, using a P2WPKH transaction with meta data transmitted via the OP_RETURN output is more feasible.

The P2WPKH flow is as follows;

1. user connects wallet to bigmarket.ai

2. user finds market, enters amount and clicks stake

3. system crafts a PSBT with market meta data in the OP_RETURN

4. system invokes bitcoin web wallet for transaction signature

5. user signs and broadcasts

separate process let's say 'the monitor', periodically checks for new/confirmed transactions (note the monitor is decentralised - nothing to stop anyone else performing the same function).

On detection of new transaction;

1. monitor reads the transactions block data and constructs a Merkle proof

2. monitor submits Merkle proof to contract

3. contract (using clarity-bitcoin-v5) determines the validity of transaction

4. contract transfers the staked amount of sBTC to the staking contract - along with the user and market details

Periodically the monitor can also submit a transaction to the sBTC Bridge to convert the user bitcoin stakes to sBTC.

Risks:

parsing op_return in clarity - not sure if / how this is done atm?