The Protocol: Bitcoin's OP_CAT, Fake Ethereum Tokens, Starknet's Airdrop

CoinDesk's Jamie Crawley takes a look at the suddenly-high-profile proposal to revive Bitcoin's historic "OP_CAT" function as a way of enabling more development on the oldest blockchain. PLUS: the unofficial "ERC-404" tokens driving up fees on Ethereum and highlights from our Protocol Village column over the past week.

AccessTimeIconFeb 14, 2024 at 6:11 p.m. UTC
Updated Mar 9, 2024 at 5:53 a.m. UTC

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In this week's issue:

  • ERC-404 tokens take over Ethereum. But wait – now there's DN-404s.
  • A group of Bitcoin developers are pushing for the return of a function called OP_CAT, which supposedly could help unleash a flurry of additional features on the oldest and still-largest-by-far blockchain.
  • Top picks from our Protocol Village column of blockchain project news over the past week: Polygon, StarkWare, Tezos, Cosmos, Sommelier, Arbitrum.
  • Starknet's STRK token airdrop and Wormhole's W.
  • Nearly $50M of blockchain project fundraisings.
  • DATA CORNER: Ethereum validator staking queue backs up.

This article is featured in the latest issue of The Protocol, our weekly newsletter exploring the tech behind crypto, one block at a time. Sign up here to get it in your inbox every Wednesday. Also please check out our weekly The Protocol podcast.

Network news

FILES NOT FOUND: Ethereum has a standardized process for adding new token standards, including the well-known ERC-20, for fungible tokens, and ERC-721, for non-fungible tokens or NFTs. But a new unofficial token standard, ERC-404 is suddenly getting traction – and there's now a supposedly improved version called DN-404. Both standards aim to combine virtues of fungible and non-fungible tokens, theoretically offering the potential to fractionalize NFTs – sort of like creating separate tokens representing a partial interest. The first ERC-404 token, PANDORA, traded as high as $32,000 on Friday morning from a low of $250, in just under a week, as reported by CoinDesk's Shaurya Malwa. "Several projects have already latched on to the hype and issued their own versions of ERC-404 tokens," including on the Arbitrum and Solana blockchain ecosystems, Malwa wrote. According to the analysis firm FundStrat, "this standard also seamlessly aligns with the ongoing trend of meme token trading." Nansen, the blockchain data firm, noted in an email that PANDORA "recorded a staggering $190 million in trading volume just a week after it was launched." The flurry was enough to drive a spike in Ethereum fees. Wu Blockchain newsletter wrote that "the current hype and FOMO are already very strong." CoinDesk's Daniel Kuhn wrote that there are nagging worries some blockchain users might mistakenly think that ERC-404s have been approved and vetted under the official process – raising "concerns over the safety of the technical design of ERC-404s, considering that they are unaudited." On Monday, a group of Ethereum application developers started a new unofficial token contract purporting to solve some of the apparent drawbacks – called DN-404, short for “Divisible NFT-404.” One of the developers, who goes by the X handle @0xQuit, tweeted that the newer version "averages about 20% gas savings vs ERC-404."

AIRDROP SEASON: Starknet Foundation, supporting the Ethereum layer-2 blockchain Starknet, announced plans for the much-awaited airdrop of STRK tokens next week, on Feb. 20. (As of early Wednesday, traders on the decentralized exchange Aevo's pre-launch futures were already suggesting that the project's market capitalization might exceed $1 billion when it goes live on Feb. 20.) Separately, the cross-chain protocol Wormhole announced a planned airdrop for its new W token, including 12% of the tokens for core contributors and 31% for "ecosystem and incubation," which includes growth initiatives for the project's developer community.


  • Ethereum developers set a target date of March 13 for its long-awaited Dencun upgrade, officially triggering the countdown to the blockchain's biggest changes since April 2023.
  • Deposits in the Ethereum restaking protocol EigenLayer are now up to $6.5 billion, ranking it as the fifth-biggest DeFi protocol overall according to DeFiLlama, up from around $2 billion just before a cap was lifted last week.
  • Vitalik Buterin wrote in a tweet that the decentralized social network Farcaster could have staying power, responding to a post about the short burst of popularity that FriendTech enjoyed after it debuted last year on Coinbase's layer-2 network, Base.
  • ICYMI: CoinDesk’s new owner, Bullish, appointed Sara Stratoberdha as CEO, replacing Kevin Worth, as part of a restructuring that also saw the departures of other senior employees. Chief Content Officer Michael Casey no longer has in a full-time role but is in discussions to potentially remain connected to the company in some capacity. (CoinDesk)
  • Solana's second phone crosses 100,000 presales, securing $45M for development. (Link)
  • The legendary auction house Sotheby’s plans a sealed auction of EtherRock NFTs starting Wednesday.

Protocol Village

Top picks of the past week from our Protocol Village column, highlighting key blockchain tech upgrades and news.

The Type 1 Prover

Schematic of Polygon's "Type 1 Prover" (Polygon)

  1. Polygon Labs, the developer behind the Polygon blockchain, released Thursday a "Type 1 prover," a new component allowing any network compatible with Ethereum's EVM standard to become a layer-2 network powered by zero-knowledge proofs, and to connect to Polygon’s broader ecosystem. (CoinDesk 20 asset: MATIC)
  2. StarkWare, the developer behind the Starknet blockchain, announced on Thursday the launch of a new “Cairo Verifier” in the next few weeks, opening the door to layer-3 application-based chains on Starknet.
  3. The Tezos blockchain on Friday activated its fifteenth upgrade, called Oxford 2, according to the team: "The upgrade introduces private smart rollups as a new security feature for developers, a smoother staking process for validators and an adjustment to slashing penalties, among other changes. The upgrade comes a month before the main net launch of Etherlink, an EVM-compatible Layer 2 built on Tezos and powered by Smart Rollups."
  4. Cosmos Hub and Babylon, a platform developing the first Bitcoin Staking Protocol for the PoS ecosystem, announced a proposed initiative to integrate Babylon’s staking protocol into the Cosmos network. (CoinDesk 20 asset: ATOM)
  5. Sommelier, a DeFi platform offering yield-generating vaults, is expanding to Ethereum layer 2s via Axelar's cross-chain messaging. According to the team: "This allows accessing new opportunities and users across chains. Sommelier launches its first layer 2 vault, Real Yield ETH, on Arbitrum. The vault uses dynamic strategies like liquidity provision and risk-managed leverage to optimize yields on ETH-denominated assets.

Satoshi-Era Bitcoin Function 'OP_CAT' Dusted Off as Development Fervor Grows

Bitcoin Developers

Armin Sabouri (left), one of the co-authors of the OP_CAT proposal; with Dan Gould, a Bitcoin developer; and co-author Ethan Heilman, in October at Chaincode Labs' Bitcoin Research Day, in New York. (Neha Narula)

As Bitcoin developers experiment with features and upgrades that increasingly resemble the vibrant activity on alternative blockchains like Ethereum, some of programmers are pushing for a revival of a piece of code that existed on the network in its early days.

A Bitcoin improvement proposal (BIP) for a new version of the "OP_CAT" code, introduced in October, aims to restore functionality that was available in early versions of the blockchain's software but was removed by its elusive and likely pseudonymous creator, Satoshi Nakamoto, in 2010.

The developers behind the proposal, Ethan Heilman and Botanix Labs' Armin Sabouri, describe OP_CAT as a simple opcode – just a dozen or so lines of code – that could provide the general-purpose functionality that's been missing from Bitcoin since its very early days, and that's seen as a key driver of growth on Ethereum, the second-biggest blockchain. So-called layer-2 networks might be easier to build atop Bitcoin, along with other innovations like decentralized exchanges or file hosting.

"My biggest use case for CAT is introducing protocols that have the ability to post something on the layer 1 and have another transaction reference it, showing that one element proves another element and so on," Sabouri told CoinDesk.

Money Center


  • The dYdX Foundation has secured $30M in DYDX from the dYdX Chain Community Treasury, after a vote by the dYdX DAO, according to the team.
  • Crypto wallet firm Fordefi raised $10 million in venture capital investment, aiming to solve one of the biggest pain points in crypto by expanding its institutional-focused wallet offering to retail-facing platforms, the company told CoinDesk in an exclusive interview.
  • Flood, a protocol for order routing, management, and settlement, announced its $5.2M seed funding round, co-led by Bain Capital Crypto and Archetype, with participation from Robot Ventures.
  • FuzzLand, a Web3 security and analytics company, has closed a $3M seed funding round led by 1kx with participation from HashKey Capital, SNZ and Panga Capital, according to the team.
  • Analog, a U.S.-based Web3 platform focused on omni-chain interoperability, announced the completion of its latest funding round. According to the team: "Investors in the round include Balaji Srinivasan, Mike Novogratz’s Samara Asset Group, Tribe Capital, NEAR."

Deals and Grants

Data and Tokens

Ethereum Validator Entry Queue Signals Renewed Interest in Staking


The Ethereum network is witnessing a spike in the number of validators looking to stake their ether (ETH), CoinDesk's Omkar Godbole reports. The so-called validator entry queue has jumped to 7,045, the highest since Oct. 6, according to data source ValidatorQueue. “Resurgence in Ethereum staking activity indicates initial signs of renewed vitality,” David Lawant, head of research at institutional crypto exchange FalconX, wrote in an email. While the number of stakers looking to join the network has spiked, the tally remains well below the figures over 75,000 seen following Ethereum’s Shapella upgrade in April last year.


Edited by Bradley Keoun.


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CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Bradley Keoun

Bradley Keoun is the managing editor of CoinDesk's Tech & Protocols team. He owns less than $1,000 each of several cryptocurrencies.