Cardano’s research and engineering arm, Input Output Global (IOG), has unveiled “Cardinal,” the first protocol that allows native Bitcoin unspent transaction outputs (UTXOs) — including Ordinals — to circulate inside Cardano-based decentralized-finance markets without custodians or federations.
Cardinal keeps the original satoshis on the Bitcoin base layer, secured by a MuSig2 aggregated multi-signature controlled by a rotating operator set. A hashed-timelock contract (HTLC) defines the conditions under which the funds may be reclaimed; on the Cardano side, an extended-UTXO (eUTXO) smart contract mints a 1:1-pegged non-fungible token that represents the locked UTXO. Off-chain verification is supplied by BitVMX, a verifiable-execution framework that publishes fraud proofs to Bitcoin if an operator cheats. Pellerin noted that the “1-of-n honest” assumption keeps the bridge closer to Bitcoin’s own security model than today’s federated walk-arounds such as wBTC.
Cardano’s eUTXO accounting mirrors Bitcoin’s own UTXO structure, simplifying the mathematical equivalence proofs required for a symmetric peg. Low fee volatility, native tokenization (no ERC-721 wrapper layer) and deterministic, script-level transaction costs further influenced the choice, Pellerin said. Nevertheless, the specification released on GitHub is chain-agnostic; extensions for Ethereum, Solana and Avalanche are already sketched in the repository.
Cardinal is not yet a turnkey consumer product. Pellerin stressed that the release is “infrastructure” and called for external contributors to improve SNARK-based burn-proof generation, recursive state proofs and wallet UX. Independent auditors will also need to scrutinize the MuSig2 implementation and operator rotation logic, both frequent failure points in prior bridge exploits.
At press time, ADA traded at $0.6984.
