Bitcoin's on-chain pioneering native ICO mechanism "PRECOP"!
Simplicity contracts combined with atomic swaps, issuing tokens directly without relying on cross-chain bridges

Developer laz1m0v demonstrated a Bitcoin L1 native ICO mechanism based on Blockstream Simplicity smart contracts, completing token issuance directly on the mainnet through atomic swaps and covenant scripts, without the need for cross-chain bridges, sidechains, or third-party custody. This framework is called PRECOP (Predictive Covenant Oracle Protocol), which natively supports BTC, BRC-20, and Runes asset formats, and is currently in alpha testing.

(Background: Adam Back responds to BIP-361 “Frozen Satoshi BTC”: The threat is still far, but it’s time to prepare for an upgrade)

(Additional context: Michael Saylor warns that BIP-110 is Bitcoin’s biggest threat; the four-year cycle is dead, institutional capital is the real protagonist)

The 2017 ICO craze all took place on Ethereum; Bitcoin mainnet has never participated in this game. But now, developers have ported Blockstream’s Simplicity smart contract language to L1, creating the first native token issuance mechanism on Bitcoin’s mainnet that requires no external plugins, operating entirely through atomic swaps and covenant scripts, with no need for cross-chain bridges or sidechains.

Atomic swaps combined with covenant scripts, with no contract address to run away

According to the Delving Bitcoin forum, the core logic of the entire mechanism is simple. Users pay a specified amount of BTC as collateral, and the contract automatically transfers the corresponding tokens to the user via on-chain atomic swaps. The transaction is atomic; if not all succeed, everything is rolled back, avoiding intermediate states.

The original author states that this mechanism is supported by the PRECOP (Predictive Covenant Oracle Protocol) framework, developed using the self-made precp_sdk development tool.

The contract natively supports BTC, BRC-20, and Runes asset formats, with hard transaction rules set via covenant scripts in the Taproot MAST structure, enforced entirely by Bitcoin mainnet UTXO scripts, allowing for public auditability.

The fundamental difference from Ethereum ICOs is that Ethereum’s ICO involves sending funds to a smart contract address, with logic executed by the EVM virtual machine. Bitcoin’s solution directly leverages the atomic swap features of the UTXO model, with covenant scripts acting as “hard rules,” eliminating the need for a virtual machine.

Simplicity: From Concept (2012) to L1 (2025)

Simplicity is a smart contract language conceived by Blockstream engineer Dr. Russell O’Connor in 2012, officially launched on the Liquid Network in July 2025. It deliberately removes high-risk features common in Solidity, such as recursion, infinite loops, and global variables, instead using nine primitive combinators to compose any finite computation. All contracts can be mathematically verified for correctness via Coq before deployment.

Currently, Simplicity only has consensus-level support on the Liquid Network, a Bitcoin sidechain with approximately $3.27 billion in TVL.

PRECOP’s approach bypasses consensus layer, adopting client-side validation similar to the RGB protocol, allowing Simplicity contracts to operate on the mainnet via “local execution and on-chain settlement.” This means security guarantees come from local computation rather than full network consensus. Bitcoin mainnet does not “recognize” Simplicity logic by design, which is a conscious trade-off.

PRECOP has been validated on Bitcoin testnet Mutinynet and the first trustless covenant has been deployed on mainnet. However, the project remains in v0.1.0-alpha, with only 11 commits on GitHub, far from production readiness.

Laz1m0v also asked on X: “Should we submit this mechanism to Bitcoin mainnet?”

Blockstream’s long-term goal is to bring Simplicity from Liquid into Bitcoin’s consensus layer. But to initiate that soft fork discussion, enough real-world experience on Liquid must be accumulated first. Given the cautious attitude of the Bitcoin community toward protocol changes, this is unlikely to happen in the short term.