After Ordinals and Runes, how will Alkanes expand the Bitcoin smart contracts ecosystem?

Author: Erika Lee

Compiled by: Shenchao TechFlow

Brief description

Alkanes is a brand new meta-protocol on Bitcoin that enables the deployment of smart contracts and tokens.

Similar to Ordinals, BRC-20, and Runes protocols, it is expanding the potential possibilities of Bitcoin.

If you are following the latest developments in Bitcoin, you may have seen the name "Alkanes" in discussions among Ordinals and Runes enthusiasts. So what exactly is it?

Alkanes is a brand new Bitcoin meta protocol that introduces trustless smart contract functionality to the Bitcoin base layer without relying on cross-chain bridges or external execution layers. Developers can use it to natively build applications and issue tokens on Bitcoin, thereby expanding the capabilities of this original blockchain.

The protocol was developed by Oyl Corp after two years of infrastructure research, aiming to achieve more advanced programmability directly on Bitcoin. Decrypt spoke with Alec Taggart, co-founder and CEO of Alkanes, to gain insight into the project's origins, goals, and future plans.

What are Alkanes?

Alkanes is a Bitcoin meta-protocol founded by Alec Taggart, Cole Jorissen, and Ray Pulver. It is a framework that allows developers to embed smart contracts directly into the Bitcoin data layer using the WASM (WebAssembly) virtual machine.

Smart contracts are the core code of decentralized applications and are very common on blockchains like Ethereum and Solana. However, Bitcoin does not natively support smart contracts, which has historically limited its decentralized finance (DeFi) capabilities. But developers are exploring new methods, and the Alkanes protocol enables more functionalities to be implemented on Bitcoin.

Alkanes operate in a compact and efficient format, utilizing Bitcoin’s witness data and the OP_RETURN field to execute and track state changes. Its operation is similar to Ordinals (NFTs on Bitcoin) and Runes (fungible tokens), but adds support for WASM-based smart contracts. Execution and state transitions are handled through an indexing framework, bound to the finality of Bitcoin blocks.

Unlike Runes and the BRC-20 standard, which are primarily limited to the issuance and transfer of fungible tokens, Alkanes offers rich programmability, including automated market makers (AMM), staking contracts, free minting, NFT swapping, and more. And all of this is executed in a trustless manner on Bitcoin.

The Alkanes protocol is not intended to compete with Ordinals or Runes, but rather to coexist with them. Ordinals have ignited the cultural momentum of Bitcoin, while Alkanes provide the driving engine for it.

The design of the Alkanes protocol supports interoperability— for example, if you have an Ordinal, you can use it to mint a new Alkanes asset. This feature makes Alkanes a neutral yet scalable base layer, providing possibilities for broader innovation and development on Bitcoin. The protocol does not require cross-chain bridges or separate execution layers, allowing developers to directly access Bitcoin's native data while unlocking more application scenarios.

The founding team of Oyl has extensive experience in the Ethereum DeFi ecosystem. They see Bitcoin not only as a store of value but also as a settlement layer capable of supporting fully expressive applications. The launch of Ordinals in 2023 ignited cultural and economic activities around Bitcoin, but co-founder Taggart stated that true composability has only been realized now.

"Alkanes is the result of years of in-depth research and firm belief," Taggart said. "It proves that Bitcoin can evolve without having to mimic Ethereum. This is a native system built for users who believe in the inherent strength of Bitcoin."

The working principle of Alkanes

Alkanes introduces a new type of data primitive called "protostones", similar to runestones in Runes. Each protostone can contain multiple messages and supports a variety of operations beyond simple issuance, including creation, exchange, minting, and destruction, all of which are encoded and executed through the WASM runtime.

In Alkanes, each asset is treated as a token and a contract. The platform adopts a factory model to achieve efficient contract deployment. Developers do not need to redeploy contracts for each new asset; they only need to pass new parameters to the template. This model significantly saves block space and fees.

In Alkanes, both fungible tokens and non-fungible tokens (NFTs) are regarded as tokens. NFTs are referred to as "Orbitals," a standard developed by the community after the protocol was launched. The fungible tokens in Alkanes are similar to Ethereum's ERC-20, supporting full smart contract functionality and composability.

The first token released on Alkanes is Diesel, which aligns with Bitcoin's issuance cycle. Through Bitcoin block minting, Diesel uses an opcode to track block rewards and directly ties its issuance to Bitcoin's halving cycle.

Unlike Runes and BRC-20, the token code (ticker name) of Alkanes is not globally unique. Each token has a unique identifier, which means that the same name (for example, "Methane") can coexist under multiple IDs, thus avoiding the common name squatting issue found in other standards.

On the Alkanes protocol, popular NFT series include Alkane Pandas, which has a strong and loyal community of supporters, and Oyly on Alkanes, which is the first free-mint NFT series on Alkanes.

What is the next plan?

The Alkanes team is developing a native automated market maker (AMM) for its ecosystem while establishing ecosystem partnerships around stablecoins (Bound), block explorers (Ordiscan, Unisat), wallet libraries (LaserEyes), and DeFi protocols. These components will allow developers to build complete full-stack applications using only the native functionalities of Bitcoin.

"The goal of these applications is to demonstrate how developers can utilize Alkanes' infrastructure to build complete decentralized applications (dApps) directly on Bitcoin," co-founder Taggart added.

In addition, Oyl Corp has released its indexing engine Metashrew and all related infrastructure as open source software, allowing developers to inspect, fork, or contribute to the growth of the protocol.

The Alkanes protocol officially launched in early 2025 at Bitcoin block 880000, with the landmark event being the deployment of the Diesel contract. The community's minting activities subsequently started in early March and were automatically initialized through hardcoded settings when the protocol began scanning messages from the designated block.

Since its launch, the Alkanes project has achieved organic growth through developer experimentation and open-source contributions, while Bitcoin developers are working hard to promote a sustainable ecosystem.

Taggart stated: "The goal of Alkanes is not just to create another token standard, but to provide developers with a platform where composability, liquidity, and sovereignty can ultimately converge on Bitcoin."