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Charms

Why Charms?

Charms is a programmable assets protocol and software for Bitcoin (and soon, cross-chain), designed to be developer-friendly.

But there are already a few token standards out there, even on Bitcoin, why create another one?

In short, because none of them are programmable, or particularly developer friendly. And we are fixing this.

We believe in the magic of programmability. We also believe in decentralization and security of Bitcoin. An under-appreciated aspect of Bitcoin’s security is its UTXO model. It’s widely believed that the UTXO model is “hard” to make programmable. But, with Charms, not impossible 😼

Let us introduce: developer-friendly, programmable assets, implemented directly on Bitcoin.

Because this is kind of magical, we call such tokens charms.

What are Charms

Put simply, charms are programmable tokens on top of Bitcoin UTXOs.

Programmability is needed to do one thing: create apps. Apps are:

  • tokens
  • NFT collections
  • DEXes
  • Auctions
  • … you (create and) name it!

App state needs to be stored somehow, and that’s what charms are for.

A single charm is a token, NFT, instance of arbitrary app state. Structurally, it is an entry of mapping app -> data living on top of a Bitcoin UTXO. And you can have as many as you want, creating a string of charms.

Fungible tokens and NFTs are treated as special cases:

  • a fungible token data (within a charm) is its amount (a positive integer, e.g. 69420),
  • NFTs carry arbitrary data, which is useful for all kinds of use cases (e.g. remaining token supply — if a fungible token is managed by an NFT).

Combining tokens, NFTs and arbitrary apps in strings of charms allows for composability:

  • a limit order to trade one token for another,
  • artist royalty policies for NFTs
  • bridging
  • … limitless other things.

A string of charms gets created or spent as one unit, just like a Bitcoin UTXO. Charms can only exist on top of UTXOs (such outputs are said to be charmed). Because of this, whoever owns a Bitcoin UTXO, can do whatever they want with the charms in it (even destroy them).

How are Charms Created

Charms come into existence by the magic of spells added to Bitcoin transactions.

Difference from Runes

Runes and Ordinals are an inspiration for Charms (among other things).

Runes are tokens on top of Bitcoin, managed by runestones — metadata messages (in OP_RETURN outputs), directing minting and transferring of runes (the Runes tokens). Runestones can be viewed as a kind of spells.

Runes seem to lean towards digital artifacts, collectibles (with concepts like rarity of a name).

Charms aim to address programmability and composability: you can have multiple apps interacting with each other. Charms could (perhaps in a not too distant future) even work with Runes.