Alkanes is a metaprotocol built on top of the Bitcoin network designed to enable the creation and execution of smart contracts and programmable tokens without altering Bitcoin's core protocol. It leverages Bitcoin's existing transaction structure, particularly the witness data field, to embed contract logic and state changes. ^{[1] [3]}

Overview

Alkanes aims to expand the functionality of the Bitcoin blockchain beyond simple transactions and token issuance, allowing for the development of decentralized applications (dApps) and complex financial instruments directly on Bitcoin's base layer. ^[1]

The project was initially launched in 2023 under the name Protorunes, gaining attention amidst the rise of Bitcoin-based assets like Ordinals and BRC-20 tokens.

In early 2025, the initiative was rebranded as Alkanes by its development team, Oyl Corp., positioning it as a meta-protocol that facilitates smart contracts within Bitcoin's UTXO model ^{[1] [4]}

The protocol operates by embedding additional rule-sets within standard Bitcoin transactions, similar in principle to how Ordinals and Runes function. It utilizes the witness data segment of Bitcoin transactions for data inscription, a method adopted from the Ordinals protocol.

From the Runes protocol, Alkanes incorporates a structure for token creation, modifying it for enhanced flexibility and scalability. This approach allows Alkanes to introduce programmability to Bitcoin while remaining compatible with its underlying architecture and existing metaprotocols ^{[1] [2]}.

Technology & How it Works

Alkanes enables smart contracts on Bitcoin by embedding WebAssembly (WASM) modules directly into the metadata of Bitcoin transactions. The process involves several steps:

1. Developers write smart contracts using high-level programming languages, such as Rust.
2. The contract code is compiled into a WASM module.
3. This WASM file is then inscribed into a Bitcoin transaction, typically within the witness data field ^{[1] [2]}.

An external indexer, known as Metashrew, reads this inscribed metadata. The indexer executes the WASM contract off-chain using a deterministic WASM engine. The results of this execution, including state changes, are then recorded back on-chain through subsequent Bitcoin transactions. This off-chain execution model allows for complex logic without burdening the Bitcoin network's consensus layer ^[2].

Alkanes utilizes "protostones," which are data primitives capable of including multiple messages within a single inscription. This structure facilitates various actions like minting, swapping, and burning tokens efficiently. A key technical innovation is the factory model for contract deployment, which allows developers to launch new assets by passing parameters to existing contract templates, reducing the need to deploy entirely new contracts and conserving blockspace ^[2].

The protocol treats every smart contract as a token, following a unified template. This design ensures that when assets are transferred to a contract, its code automatically executes, enabling complex sequences of actions within a single Bitcoin transaction. Alkanes smart contracts can maintain internal state, read token balances, call other contracts, and access data from their own transaction and block, allowing for sophisticated spending rules. ^{[1] [3]}

Alkanes is designed to be compatible with existing Bitcoin metaprotocols like Ordinals and Runes. Both Rune and Alkanes tokens can coexist and be transferred within the same transaction. Existing Rune tokens can also be integrated into Alkanes smart contracts, making them usable within the Alkanes programmable ecosystem ^[2].

Ecosystem & Use Cases

Alkanes aims to enable a range of decentralized applications and financial primitives on Bitcoin. Potential use cases include:

• Decentralized exchanges (DEXs)
• Lending platforms
• Stablecoins
• Automated Market Makers (AMMs)
• Staking contracts
• NFT swaps (Alkanes refers to NFTs as "Orbitals") ^[2].

As of April 2025, the Alkanes protocol is live on the Bitcoin mainnet, supporting Taproot inputs for inscriptions. The Oyl Sandshrew indexer is operational. The first tokens and contracts have been created to demonstrate the protocol's capabilities. The initial token, DIESEL, began issuing from Bitcoin block #880000, mimicking Bitcoin's emission schedule. Another token, METHANE, was released via public minting. Other hydrocarbon-themed tokens have also been launched by enthusiasts ^[2].

A native wallet, the Oyl Wallet app, is available in beta. It supports Ordinals, Runes, and Alkanes assets, allowing users to create and send Alkanes transactions, mint tokens, and manage assets. Alkanes tokens can also be tracked and traded on the iDclub platform, which supports Ordinals assets. ^{[1] [4]}

The Alkanes team is actively developing the ecosystem, with plans including a native automated market maker (Oyl Swap) and partnerships with stablecoin projects, block explorers, wallet providers, and DeFi protocols. The Oyl Corp team has open-sourced its indexing engine, Metashrew, and related infrastructure to encourage community contributions ^[2].

Team and Funding

Alkanes is developed by Oyl Corp. In March 2024, Oyl raised $3 million in a funding round led by Arca. Notable participants included Maelstrom, the family office of Arthur Hayes, and Domo, the creator of the BRC-20 standard. ^[1]

Arthur Hayes commented on the project in December 2024, stating that Maelstrom's investment provided early access to a presentation of a "breakthrough smart contract technology for Bitcoin." He expressed hope that Alkanes could facilitate a new wave of ICOs within the Bitcoin ecosystem. ^[1]

Alec Taggart, CEO of Alkanes, has stated, “Alkanes proves that Bitcoin doesn’t need to imitate Ethereum to evolve. It’s a native system built for those who believe Bitcoin is enough.” ^[5]