KEY TAKEAWAYS
- Bitcoin Core has removed the 80-byte limit on the OP_RETURN field, enhancing data storage capabilities within transactions.
- ZetaChain leverages Bitcoin’s latest script system to improve cross-chain interoperability using Taproot and inscriptions.
- bitUSD, a BTC-backed stablecoin, is introduced on ZetaChain, enabling cross-chain operations without wrapped tokens.
Bitcoin Core has officially removed the 80-byte limit on the OP_RETURN field, a significant change announced on May 5, 2025. This development expands Bitcoin’s data capabilities, allowing for more complex data storage within transactions. The change is set to enhance Bitcoin’s on-chain functionality and cross-chain interoperability.
The OP_RETURN field, introduced in 2014, initially allowed for small pieces of arbitrary data to be included in Bitcoin transactions. Originally capped at 40 bytes, this limit was later increased to 80 bytes. Although not a consensus rule, it became a practical cap for most nodes and tools built on Bitcoin Core. The removal of this limit was proposed by early Bitcoin contributor Peter Todd, who argued that arbitrary data storage on Bitcoin is inevitable and that OP_RETURN offers a safe method for doing so.
Despite concerns from some developers about potential spam and the risk of undermining Bitcoin’s core purpose, the change was implemented in the latest Bitcoin Core release. Nodes will now relay and mine transactions with OP_RETURN outputs longer than 80 bytes, allowing multiple such outputs in a single transaction.
Innovations in Cross-Chain Interoperability
Amid these changes, ZetaChain has pioneered a solution that leverages Bitcoin’s latest script system to enhance cross-chain interoperability. By using Taproot and inscriptions, ZetaChain can pack cross-chain instructions directly into Bitcoin transactions without the need for wrapping or bridging. This approach allows for native BTC transactions that trigger cross-chain logic directly.
ZetaChain’s method utilizes Tapscript, part of the Bitcoin Taproot upgrade in 2021, to include more detailed information within a Bitcoin transaction. This includes the recipient’s EVM address and transaction metadata, creating a seamless interoperability layer. This innovation enables a single Bitcoin transaction to carry all necessary data to trigger actions on ZetaChain or any connected EVM chain, such as Ethereum, without relying on wrapped tokens or bridges.
bitUSD: A Native BTC-Backed Stablecoin
The first real-world application of this new protocol is bitUSD, a native BTC-backed stablecoin issued on ZetaChain by bitSmiley. Users can deposit native BTC to mint bitUSD, which can be used across various chains due to ZetaChain’s Universal architecture. The bitRC-20 protocol, an extension of the BRC-20 standard, supports stablecoin operations like minting and burning. Each bitUSD token is overcollateralized and backed by real BTC, with the underlying collateral secured and verifiable via native Bitcoin transactions.
This development marks a significant step towards a more active and interoperable Bitcoin, capable of participating in wider crypto ecosystems. As Bitcoin’s data capabilities expand, ZetaChain provides the infrastructure to bring these possibilities to life, enabling developers to build Bitcoin-based applications that span multiple chains while preserving Bitcoin’s core principles.
For more details, the full announcement can be found here.
Why This Matters: Impact, Industry Trends & Expert Insights
Bitcoin Core’s removal of the 80-byte limit on the OP_RETURN field marks a pivotal shift in Bitcoin’s data capabilities, enhancing its on-chain functionality and cross-chain interoperability.
A recent report highlights the growing importance of interoperability solutions in the cryptocurrency space. This aligns with ZetaChain’s innovations leveraging Bitcoin’s script system to enhance cross-chain interoperability, allowing for seamless communication and asset transfers across diverse blockchain networks.
As per insights from Greg Sanders, Bitcoin Core contributor, lifting the OP_RETURN cap will result in a cleaner UTXO set and more consistent default behavior. This supports the impact of Bitcoin Core’s decision to remove the limit, enabling more complex data storage within transactions and enhancing Bitcoin’s utility in the broader crypto ecosystem.
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