Bitcoin and DMT: Experimenting with Bitcoin's Future

Discover the latest in Bitcoin DeFi: TAP protocol enhancements, TRAC indexing, and the groundbreaking Digital Matter Theory (DMT) for non-arbitrary tokens (NATs). Dive into the evolving world of Bitcoin ordinals, inscriptions, and the burgeoning Bitcoin metaverse.

Bitcoin and DMT: Experimenting with Bitcoin's Future

The world of Bitcoin ordinals and their associated inscriptions is not taking any breaks, with new protocols, tokens and concepts being introduced daily, it is hard to keep up with the current state. One of these latest updates circles around optimizing inscriptions and governance of Ordfi, also known as DeFi on Bitcoin.

In this article, we give a short update on the experimentation of the latest TAP DMT-NAT inscriptions and see how they could be yet another building block of decentralized finance (DeFi) and why it could be the next big thing in crypto governance on Bitcoin.

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Digital Matter Theory - DMT Explained

DMT, not to be confused with the psychedelic drug, is a Digital Matter Theory that poses the possibility of creating digital substances by harnessing the patterns that naturally emerge from data.

DMT is a way to conceptualize and understand the substance and significance of digital tokens beyond their mere representation of value.

These patterns that, once recognized and utilized, could lead to the generation of a new form of digital material that has properties similar to physical matter, despite lacking a tangible presence, and could potentially possess intrinsic value and utility.

Digital Substance

Digital substance refers to a computational or informational material that behaves like physical matter. Although it exists in a digital realm, this substance can be manipulated and interacted with digitally.

Patterns in Data

The theory underscores that data analysis and interpretation can unveil underlying patterns. These patterns serve as the foundation for generating digital substances.


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Applying Digital Matter Theory to the Bitcoin Ecosystem

Bitcoin's infrastructure is replete with information logged securely on its decentralized public ledger. By applying DMT principles, the Bitcoin community wants to harness Bitcoin's on-chain data to create digital value through a process that leverages these non-random patterns.

Digital Matter Theory - Digital Matter Theory
A new era of digital substance

History and Evolution in the Digital Asset Generation

If we look at our Bitcoin history, we see that DMT marks a significant departure from traditional digital asset generation. And within the Bitcoin ecosystem, the community distinguishes three applications where the digital matter theory is present:

#1 Ordinal Theory: Introduced by Casey Rodarmor, it assigns numismatic value to satoshis, enabling their collection and trade as digital artifacts.

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#2 Rare Sats: Building on Ordinal Theory, Rare Sats are uniquely positioned satoshis on the blockchain, akin to rare collectibles in the physical world.

#3 Bitmap Theory: Proposed by Bitoshi Blockamoto, it treats each block as digital real estate, with transactions dividing the block into parcels, creating a non-arbitrary metaverse.

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These pioneering applications have set the stage for a systematic approach to creating non-arbitrary digital assets from Bitcoin's blockchain data.

Understanding Non-Arbitrary Tokens - NATs

Non-Arbitrary Tokens (NATs) are digital assets that derive their value and functionality from the principles of Digital Matter Theory. Unlike other tokens which may be created arbitrarily, NATs have specific, non-arbitrary properties that are tied to their underlying technology or use case. They are not just tokens, but are unshakably linked with a purpose within the blockchain ecosystem (in this case, Bitcoin's blockchain).

Authenticity and Provenance

Using blockchain data patterns enhances the authenticity and provenance of digital products. Blockchain's transparency and immutability offer a reliable source for verifying the origins and history of digital items.

Unique and Novel Outputs

Pattern-driven generation fosters the creation of unique digital products intrinsically connected to the blockchain's history, potentially increasing their value.

Efficient Creation

Employing existing patterns can expedite the creative process, allowing for quicker development and launch of digital content.

Reduced Subjectivity

Objective pattern reliance diminishes the subjective input from creators, resulting in more varied and impartial digital outputs.

In short, a Non-Arbitrary Token is a practical application of the Digital Matter Theory and has been deployed on the TAP protocol. 

What Is the Tap Protocol?

The Tap protocol was created to introduce new functionalities quickly, without waiting for updates to the BRC 20 standard. It is a slight modification of the BRC 20 protocol which extends its capabilities by adding a token send function.

Indexing with TRAC

The creator, Benny, the developer, launched Trac in early 2023 and wanted to present ideas to the community for immediate implementation rather than waiting months or years for BRC 20 updates.

Which allowed the community voting on new features, which is not as feasible with BRC 20 due to its current rigid structure.

TRAC is compared to Chainlink and The Graph because of its role as an oracle within the Bitcoin ecosystem.

TRAC is essentially a system that indexes everything associated with Bitcoin ordinals. It focuses primarily on the data concerning ordinals and inscriptions from their inception in December of the previous year.

Which is interesting for everyone that potentially supports services that go through the entire blockchain history, record data, and find patterns, such as the digital matter theory - DMT we discussed above.

Defi Ecosystem and Metaverse on Bitcoin

With the introduction of hybrid tokens, indexers and protocols, we see many similarities to the DeFi summer that was fueled by building a decentralized finance on Ethereum. Where fungible tokens were built alongside unique digital collectibles.

But also the metaverse developments emerged, and where each unique collectible could serve as an avatar, creating a vibrant and diverse online society. With even Gamefi kicking off, and this time perhaps on Bitcoin. - Metaverse on Bitcoin - inscribing the Metaverse on Bitcoin blockchain. - Metaverse on Bitcoin - inscribing the Metaverse on Bitcoin blockchain.

Bitfinity Addressing the Infrastructure Needs in the Ordinal Space

Despite advancements, there is still a need for more infrastructure development within the ordinal space. We take a look at how Bitfinity can help with building this new world on the oldest and most secure chain. 

The Need for Interoperability Standards

The decentralized Bitcoin developments require solidification, and there is an ongoing discussion about the right implementations for these information processes.

A particular focus on interoperability stands at the forefront of Bitfinity's innovations. Bitfinity transcends the traditional barriers between blockchains, creating a synchronized environment where Bitcoin and BRC-20 tokens can be scaled and minted as efficiently as they should be, at fractions of the costs.

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The Beginning of a Larger Movement

The current uptick in user interest and experimentation is just the tip of the iceberg. As more people join decentralized finance experimentation in the Bitcoin ecosystem, it creates a virtuous cycle, attracting builders and coders that can do so in an optimal and familiar way using the familiar EVM which will be provided by Bitfinity on Bitcoin.

Not only this, but Bitfinity is working on an Ethereum bridge that will signal a new era of simplified transactions and all internal asset transfers users want to perform and protocols want to, in order to explore the possibilities of Bitcoin's ecosystem.

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This is not all, Bitfinity wants to connect the two largest chains. Facilitating the renaissance for Bitcoin with the Ethereum Virtual Machine, bringing developers together with insane amounts of liquidity. Building new pathways for Ethereum's already expansive applications to be ready for deployment on Bitcoin as well. As a result, developers will have fertile ground for creating decentralized applications that leverage untapped liquidity.


The DeFi landscape on Bitcoin Ordinals is still in its nascent stages, with various teams working on protocols that could revolutionize the space. These new tokens and theories potentially hold value and form a whole new use case of Bitcoin's blockchain.

The direction of DeFi on Bitcoin, including whether it might migrate to layer two solutions, remains to be seen. But what we do know is that functionalities of BRC 20 tokens and other, even perhaps new token standards on Bitcoin can and will be extended by Bitfinity for more advanced functions and compatibility with Bitcoin-based financial protocols.

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