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Wrapping & Unwrapping frBTC

One of the core functionalities of the SUBFROST ecosystem is the ability to create frBTC, a synthetic asset pegged 1:1 to Bitcoin.

This is achieved through a trust-minimized process that locks BTC on the Bitcoin mainnet and mints a corresponding amount of frBTC on the SUBFROST protocol.

This guide will walk you through the process using the subrail-cli CLI.

Wrapping Process​

Wrapping involves creating a Bitcoin transaction that performs two actions simultaneously:

  1. Locks BTC: Your BTC is sent to a secure, multisignature address controlled by the SUBFROST signers.
  2. Mints frBTC: An OP_RETURN output in the same transaction contains instructions for the Alkanes metaprotocol to mint an equivalent amount of frBTC and assign it to your SUBFROST address.

1. Generate a SUBFROST Wallet​

If you haven't already, you need a SUBFROST wallet to receive your frBTC.

subrail-cli wallet create

This command will generate a new wallet and display your address. Keep your mnemonic phrase safe and private.

2. Initiate the Wrap​

To wrap BTC, you will use the subrail-cli alkanes execute command. This command gives you fine-grained control over the transaction construction.

Example: Wrap 0.1 BTC​

subrail-cli alkanes execute \
  --to "[self:p2tr:0],<SUBFROST_ADDRESS>" \
  --inputs "B:10000000" \
  --change "[self:p2tr:1]" \
  "[4,TBD,77]:v0:v0:[B:10000000:v1]"

Breakdown of the Command:​

  • --to "[self:p2tr:0],<SUBFROST_ADDRESS>": This specifies the outputs of the transaction.
    • [self:p2tr:0]: This is your own address (the first Taproot address in your wallet) which will receive the newly minted frBTC. This is v0.
    • <SUBFROST_ADDRESS>: This is the placeholder for the SUBFROST multisig address where the BTC will be locked. This is v1.
  • --inputs "B:10000000": This specifies that you want to use 0.1 BTC (10,000,000 sats) from your wallet as input for this transaction.
  • --change "[self:p2tr:1]": Any change from the transaction will be sent to the second Taproot address in your wallet.
  • "[4,TBD,77]:v0:v0:[B:10000000:v1]": This is the protostone, which contains the instructions for the Alkanes metaprotocol.
    • [4,TBD,77]: This is the instruction to mint frBTC. 4 is the block number of the frBTC alkane, TBD is the transaction index (as it's not yet deployed), and 77 is the opcode for minting.
    • :v0:v0: This targets the first output (v0, your address) and points to it.
    • :[B:10000000:v1]: This is an "edict" that specifies that 0.1 BTC (B:10000000) should be sent to the second output (v1, the SUBFROST multisig address).

subrail-cli will then guide you through the process, which will involve signing the transaction.

3. Confirm Your frBTC Balance​

After the Bitcoin transaction is confirmed, the frBTC will be minted on the SUBFROST protocol. You can check your balance using subrail-cli.

subrail-cli balance --address <your-subfrost-address>

Unwrapping Process​

Unwrapping is the reverse process: frBTC is burned and the equivalent amount of BTC is released from the multisig address back to a Bitcoin address you specify.

1. Initiate the Unwrap​

To unwrap frBTC, you will again use the subrail-cli alkanes execute command.

Example: Unwrap 0.1 frBTC​

subrail-cli alkanes execute \
  --to "<YOUR_BITCOIN_ADDRESS>" \
  --inputs "<frBTC_alkane_id>:<output_index>:10000000" \
  --change "[self:p2tr:1]" \
  "[<frBTC_alkane_id>,10000000,88]:v0:v0"

Breakdown of the Command:​

  • --to "<YOUR_BITCOIN_ADDRESS>": The destination Bitcoin address that will receive the unlocked BTC.
  • --inputs "<frBTC_alkane_id>:<output_index>:10000000": This specifies the frBTC tokens you want to burn. You will need to replace <frBTC_alkane_id> with the actual Alkane ID of frBTC and <output_index> with the output index of the UTXO that holds your frBTC.
  • --change "[self:p2tr:1]": Any change from the transaction will be sent to the second Taproot address in your wallet.
  • "[<frBTC_alkane_id>,10000000,88]:v0:v0": This is the protostone for burning the frBTC. 88 is the opcode for burning.

2. Receive Your BTC​

Once the SUBFROST transaction is finalized, the signers will cooperatively sign a Bitcoin transaction to release the locked BTC to your specified destination address. This process is automated and secured by the FROST Protocol.