Question about OP_CTV and Non-Recursive Covenants

The discussion revolves around the intricacies of using CheckTemplateVerify (CTV) for Bitcoin transactions, specifically in the context of creating binding offers and commitments without necessitating a prohibitive number of signatures. CTV facilitates the creation of transactions that commit to specific outcomes without requiring all details to be fixed at the time of transaction creation. This feature is particularly useful in scenarios where one wishes to create an offer for a transaction that can only be completed under certain conditions.

A practical application of this mechanism is illustrated through the process of making a rune buy offer. By employing a Partially Signed Bitcoin Transaction (PSBT) with the SIGHASH_ALL flag, a buyer can commit to purchasing runes of a specific type from a seller, leaving the latter to sign their input to complete the transaction. This approach, however, is deemed inefficient for large-scale operations due to the need for a distinct signature for each UTXO containing the requisite amount of runes, potentially resulting in thousands of signatures.

An alternative solution proposed involves creating an initial transaction that commits to a Pay-to-Taproot (P2TR) output with a unique script spend path for each UTXO targeted by the offer. This transaction would not contain signatures but would instead commit to a subsequent "reveal" transaction for each UTXO, designed to distribute the runes to the buyer and the corresponding payment to the seller. While this method addresses some scalability concerns by reducing the number of required signatures, it encounters a significant limitation: there currently exists no mechanism to commit to a specific spent outpoint, which is a critical requirement for the proposed scheme to function effectively.

For further details on implementing inscription buy offers using this methodology, reference is made to the ordinal's implementation as documented in their GitHub repository (inscription buy offers).

In summary, while creative uses of CTV and PSBTs present promising solutions to enhance Bitcoin's transactional flexibility, limitations exist—particularly related to scale and technical feasibility—that must be addressed to fully realize their potential benefits.