What Is TAP Protocol And What Does It Bring to Bitcoin?

The launch and subsequent popularity of the Ordinals protocol has made significant impact on the Bitcoin ecosystem. Now, new projects like multi-asset metaprotocol TAP Protocol are aiming to bring more innovation into the space created by Ordinals. 

In this guide, we’ll walk you through the basics of TAP Protocol and how it fits into the Bitcoin ecosystem.

TAP Protocol (short for Tokenized Asset Protocol), created by the pseudonymous developer BennyTheDev, describes itself as a digital asset issuance protocol aimed at creating and improving OrdFi. 

It’s DeFi based on the Ordinals protocol that should enable “the secure locking of value on Bitcoin.” 

It also creates the TAP token standard, which aims to improve the creation and handling of digital assets in the Bitcoin ecosystem. 

The protocol belongs to the Trac ecosystem (also developed by BennyTheDev), which is made up of Trac Core and Pipe Protocol, in addition to TAP itself. Together, they aim to create a Bitcoin-based ecosystem that takes advantage of the network’s capabilities, both innate and new.

TAP Protocol allows you to issue tokens with potential use cases in gaming, bridging, swapping, staking, airdrops, token trades, and more. 

The team behind the project claims that it has already onboarded more than 70,000 users and has more than 50 projects built on it. The builders of the protocol say they raised $4.2m in a fundraising round, led by Sora Ventures, founded by a Bitcoin ecosystem investor Jason Fang.

TAP Protocol consists of two parts: external and internal.

Its external part functions the same way as BRC-20, a fungible token standard on Bitcoin. In practice, this means that marketplaces and wallets connecting to TAP can clone their existing BRC-20 infrastructure and then implement either the protocol’s internal functions or endpoints, allowing balance verifications. Some minor modifications are necessary for indexers that are covered in the project’s docs.

One important difference from other, similar solutions is that it uses tapping, where an inscription is re-sent to the same address for verification. This confirms that the address has enough funds for the requested transaction, whereas invalid and semantically incorrect token sends are skipped.

TAP Protocol’s internal part serves to define exactly what it is capable of doing. Currently, the protocol supports the mass sending of tokens, which can be used for airdrops.

The team is working on new features that are then added to their GitHub ReadMe, and the features, as well as their order of implementation, are decided by their community. 

According to their announced plans, new features and dapps might include fractionalizing Ordinals art, borrowing, lending, and staking. Regardless of whether they are part of the governing group, users are encouraged to join the project’s Discord channel to ask questions, give feedback, and otherwise participate in the nascent ecosystem.

All of these features, in addition to those to come, could help TAP embed its standard into different OrdFi projects and ecosystems by providing an alternative to similar asset issuance metaprotocols.

The TAP Protocol’s primary purpose is to bring a new token standard to OrdFi to simplify the creation and sharing of new tokens in the Bitcoin network. 

This way, the budding ecosystem on Bitcoin can be enriched with new tokens for various use cases, depending on the needs of the community, thus letting it grow and develop organically.

TAP Protocol builds upon the experimental BRC-20 standard, aiming to improve perceived shortcomings like the cost of airdrops and multisends, and generally offering more functionalities. 

All of these new functionalities, both existing and yet to come, allow more complex financial operations on the Bitcoin blockchain directly, without the need for Layer 2 solutions.

TAP Protocol, BRC-20, and Runes have quite a bit of overlap, considering they’re all token issuance metaprotocols. However, their differences are important, as they’re often the reason why users opt for one protocol instead of another.

In other words, the biggest difference is that TAP Protocol aims to offer a more comprehensive, richer suite of tools for different assets built upon it. 

It’s also part of a wider Trac ecosystem, so it’s already finding use cases within its community without necessarily relying on external adoption — although that is still one of its goals.

One of the biggest current challenges TAP Protocol is facing comes from its age: there are relatively few features supported, compared to the number they want to implement. However, the team wants to leave these decisions up to the governing community.

Other potential limitations, if they appear, will become apparent with the protocol’s further adoption. Applications and use cases will show whether it’s all as watertight as the team and its community believe.

TAP Protocol’s stated goal is to cover all the use cases present in a DeFi ecosystem. 

Right now, it can be used for gaming (for example, in games needing tokens) and issuing both fungible and non-fungible tokens (such as Natcats).

Beyond these basic use cases, the project is also aiming to implement anything that its community agrees on by voting, as long as it is viable. 

For this reason, they say they keep their options open to cover any application needing asset issuance in its foundation. If successful, this ecosystem might also see use cases such as bridging, swapping, staking, fractionalization of Ordinals, and more.

TAP Protocol is a multi-asset protocol working on bringing DeFi functionalities to Bitcoin based on the Ordinals Protocol. It is a protocol looking to overcome the issues of the BRC-20 standard and make asset issuance more simple and fully functional, along with serving a multitude of use cases.

Although the protocol is still relatively new, it is already working on shifts from the BRC-20 standard to its solution. Its full capabilities, as well as any potential drawbacks, are yet to be shown.

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