Jeremy Rubin has released a proposal called Un’FE’d Covenants that presents a practical alternative to existing covenant proposals for Bitcoin. Unlike previous proposals, Jeremy's proposal does not require a soft fork or impose a high cost on users. Instead, it utilizes a system of oracles and BitVM based bonds to emulate covenants on Bitcoin. Oracles enforce covenant conditions and are entrusted with the custody of funds. To avoid state risks, Jeremy incorporates Taproot and Schnorr based keys to tweak the public keys used by oracles. The proposal also discusses the use of federated oracles and the optimization of data requirements using zero knowledge proofs. Additionally, the proposal suggests securing the system with crypto-economic incentives and collateral bonds. However, there are trade-offs such as the need for online oracles, potential liquidity requirements, and increased data on-chain. Overall, Jeremy's proposal provides a viable option for implementing covenants in Bitcoin if native implementations are not feasible.



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