📖Indexer Oracle

The Ordinals protocol is an asset issuance protocol based on Bitcoin network, launched by Casey Rodarmor in January 2023. The protocol consists of two parts: Ordinals theory and Inscription engraving. Ordinals theory provides a method for assigning unique identifiers to 21 trillion Satoshis (the smallest unit of Bitcoin), while Inscription is the process of associating content with UTXOs.

The Ordinals protocol is an asset issuance protocol based on Bitcoin network, launched by Casey Rodarmor in January 2023. The protocol consists of two parts: Ordinals theory and Inscription engraving. Ordinals theory provides a method for assigning unique identifiers to 21 trillion Satoshis (the smallest unit of Bitcoin), while Inscription is the process of associating content with UTXOs.

What's BRC-20 Indexer?

A BRC-20 index is a database that keeps track of the wallets & amounts of BRC-20 tokens held.

Bitcoin is not a “virtual machine” L1 such as Ethereum. Bitcoin smart contracts are limited in scope to “send” and “receive” transactions. The fully expressive smart contracts that enable decentralized applications on-chain aren’t possible on the Bitcoin core protocol.

And once minted, to transfer your BRC-20 requires inscribing a “transfer” transaction, and this transfer inscription is what is sent to a different wallet address.

If this seems a bit rudimentary, it is because BRC-20 is a token standard operating without smart contract capabilities. The Bitcoin protocol does not “see” the deploy, mint or transfer transactions as it does not read the data. There is only the transfer of satoshis from one wallet to another, no different than any other Bitcoin transactions.

Indexer Oracle

Indexer Oracle is a smart contract running in the EVM environment, providing the same functionality as centralized indexers. The Oracle is maintained by nodes in the Merlin Protocol, and the nodes earning Merlin tokens as incentives.

The changes of status in the inscriptions occurring on the Bitcoin network will be synchronized to the Indexer Oracle. Users can access BRC20 index information through the ABI interface, enabling protocol parsing for BRC20 at the smart contract level and mitigating the risks associated with malicious actions by centralized indexers.

Reference code:

TBD