The whole CTV activation thing seems super technical, but we gotta talk about the economic side too. Like, can covenants really drive the fee demand Bitcoin needs as subsidies go down? Right now fees are only a small slice of miner revenue, and that’s gonna drop even more in a few years.
Covenant Opcodes and Their Economic Implications for Bitcoin
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Honestly, I think covenants have more use cases than most peeps realize. They can help with vaults, congestion control, and making wallets easier. But there's no guarantee they’ll keep L1 fee pressure up. Some use cases might actually lessen activity, which is cool for users but not for miners' earnings. It’s a tricky balance.
Good point about fee compression. If settlements get more efficient, it could mean fewer bytes needed per transaction. That kinda messes with the fee market... But I agree with your second take. Right now people are stuck choosing between Bitcoin-native vaults or those custodial yield things you mentioned. Most are going for the yield goblins since the native stuff isn't ready.
From what I see, builders won’t start serious work until the target is stable. You can keep tinkering with covenant ideas, but who wants to risk building real wallets on uncertain opcodes? Activation should be the priority since it gives a solid base for builders. After that, it’s all about how useful the tools can get.
Totally sharp take, especially about activation providing that stable floor. It’s a bottleneck for sure. And yeah, the initial focus won’t be the flashy stuff, but the boring basics like vaults and custody. That’s what institutions need before diving into anything new. The wrapped BTC and custodial lending thing keeps nagging at me too. That’s $70 billion happening outside of Bitcoin’s trust model now.