Bitcoin’s BRC-20 Token Explosion Soars 682% In Just One Week
The demand for “Bitcoin Request for Comment” (BRC-20) tokens, built using Ordinals and stored on the Bitcoin BTC/USD base chain, has surged dramatically, with their market value increasing by several hundred percent. Currently, the combined market capitalization of over 8,800 BRC-20 tokens stands at $137 million – a remarkable 682% increase from $17.5 million just a week ago, as per data monitored by Ordinals-builder Ordspace, Coindesk reported.
The BRC-20 token standard was developed in early March by an anonymous on-chain analyst named Domo. The goal was to enable the issuance and transfer of fungible tokens on the Bitcoin blockchain.
This innovative approach came shortly after the launch of the Ordinals Protocol, which permits users to embed digital art references within small transactions on the Bitcoin blockchain.
Dynamo DeFi, a pseudonymous analyst and yield farmer, commented in their weekly newsletter, “Ordinals on Bitcoin have had unintentional consequences. One of these is the invention of the BRC-20 fungible token standard. It’s now possible to create fungible tokens on Bitcoin. Since inception, BRC-20s have accounted for nearly 6% of all Bitcoin activity.”
Although BRC-20 may sound similar to the popular ERC-20 standard, they are distinct, with the former lacking the ability to interact with smart contracts.
The ERC-20 is a technical standard for creating fungible tokens on the Ethereum ETH/USD blockchain, which is well-known for its smart contract capabilities.
Crypto exchange Binance clarified in an explainer, “This [BRC-20] is not a token standard like you’re accustomed to with EVM chains, which create smart contracts that manage the token standard and its various rules. Instead, it’s simply a way to store a script file in Bitcoin and use it to attribute tokens to satoshis and then allow them to be transferred between users.”
The majority of active BRC-20 tokens are classified as meme coins – cryptocurrencies derived from internet memes or humorous features. As of now, the top three coins created using the BRC-20 standard are ORDI, OG, and PEPE. According to Mark Jeffrey from Boolean Fund, the introduction of BRC-20 tokens has rendered crypto exchanges unnecessary.