Introduction

RSM is a Turing-Complete State Machine for Runes Protocol

Time: Jun. 21 2024

Creator: Mikael.btc

Email: [e-mail]

Twitter: https://x.com/MikaelBTC

RSM Introduction

This document is intended to manage Runes State Machine (RSM) and all contracts. The following table shows the current status of them.

RSM Contract	Creator	Description	Status	Time
Contract-XXX		More RSM Contracts
...		...
Contract-016		An Asset Vesting Contract
Contract-015		An Aggregator Contract for Lending
Contract-014		An Aggregator Contract for Decentralized Exchange
Contract-013		A Launchpad Contract for BRC-100 Assets
Contract-012	Mikael.btc	An Asset Issuance Contract for Administrator
Contract-011		A Verification Contract for Bitcoin Layer 2
Contract-010		A Relay Contract among Runes and EVM Compatible Blockchains
Contract-009		A Decentralized Exchange Contract for Perpetual Futures
Contract-008		An Automated Liquidity Contract for Stablecoin
Contract-007	Mikael.btc	A Decentralized Lending Contract
Contract-006	Mikael.btc	A Decentralized Collateral-backed Stablecoin Contract
Contract-005	Mikael.btc	A Decentralized Airdrop Contract
Contract-004	Mikael.btc	A Liquid Staking/Restaking Contract for Runes, BTC, BRC-20 and BRC-100
Contract-003	Mikael.btc	A Relay Contract among Bitcoin, Runes, BRC-100 and BRC-20
Contract-002	Mikael.btc	An Automated Liquidity Contract for Runes Assets	Relesed	Jul. 8 2024
Contract-001	Mikael.btc	A Decentralized On-Chain Governance Contract
RSM	Mikael.btc	RSM: Runes State Machine	Relesed	Jun. 21 2024

As we all know, Ordinals Theory, Runes, BRC-20 and other meta-protocols based on Bitcoin have brought a lot of imagination to the development of Bitcoin ecosystem through "on-chain declaration, off-chain computing" mechanism. And a large number of non-fungible tokens (NFTs) and fungible tokens have been issued, but the development of decentralized applications such as DeFi (Decentralized Finance) on Bitcoin is still lagging behind. This document explores a new paradigm for the computing capabilities of Runes Tokens: Runes State Machine (RSM). Besides asset issuance, RSM enables Runes protocol with the complex computing capabilities required for DeFi and other decentralized applications, to create the potential for decentralized applications based on Bitcoin Layer 1.

https://docs.ordinals.com/

https://docs.ordinals.com/runes/specification.html

Runes State Machine (RSM) is a Turing-Complete State Machine for Runes Protocol, serves as the runtime environment for the pre-defined Contracts, which can be deployed and run in RSM. RSM is a Runes Improvement Protocol. Contract is a collection of states and state transition functions. When deploying a Runes token, developer can choose which contract to implement. RSM introduces decentralized computing capabilities to the Runes protocol, endowing Runes tokens with programmability, enabling complex decentralized applications like DeFi for Runes Protocol besides token issuance. Each token/application can define its computing logic and internal state through implementing a Contract. Additionally, RSM proposes an application/token modular approach: nesting, which provides a theoretical foundation for the infinite extension of application computing capabilities. Essentially, RSM describes a token with computing capabilities and state, where the token's behaviors are extended from Runes protocol. The computing capabilities, states, and state transition rules are defined in the Contract. Tokens compliant with the Runes Protocol standard can be used in any Contract, and the process is entirely decentralized, without custody of user assets.

RSM is based on two models: UTXO model and state machine model, which greatly extends the computing capabilities of Bitcoin. The operation of token satisfies the UTXO model, and the computation conforms to the state machine model. And RSM provides new operations: burn2/burn3 and mint2/mint3, so that token can be converted between UTXO model and state machine model, decentralized and safely.

RSM introduces many concepts, please read the explanation below firstly.

Term	Description
Runes State Machine (RSM)	A Turing-Complete state machine to run Contracts for Runes Protocol
Contract	A standard to define the computing capabilities of a token, running on RSM, is a collection of pre-defined states and state transition functions
Token/Rune	Created by etchings, implements different Contract, with different computing capabilities
Application	The Rune/Token that implements a Contract can be called Application
State	A situation of a token depending on previous inputs and causes a reaction on following inputs, defined in the Contract
State Transition Function	Computes the next state of the token given the current state and inputs, defined in the Contract
Token Nesting	Multiple runes/tokens can be created under one rune/token, to complete multiple independent computing logics, called child rune/token
Governance of Rune/Token	The process of updating rune/token attributes, creating child runes/tokens
Oracle	Indexers can serve as the Oracle Verifier to verify the off-protocol proof data submitted by the user

RSM is open, and developers are welcome to participate in building contracts, developing applications, and jointly building the Bitcoin ecosystem. You can join the RSM Community: https://t.me/RSMCommunity.

Also, if you like RSM, you can donate to: bc1pzwv3gfp8yvu0w893ekhte8h63cq0u306k62qnwgvpyy0naw7npjqvf4qhg.