HomeOPINIONWhat are BRC-20 Tokens?

What are BRC-20 Tokens?

-

Follow us

9,910FollowersFollow

The emergence of BRC-20 tokens have continued to overwhelm the crypto world. They exist as a new form of crypto, developed and traded on the Bitcoin network. According to findings, the creation of this token standard materialized owing to the growing attention and hype of memecoin projects. Notably, BRC-20 tokens are similar to ERC-20 tokens running in Ethereum. But, these tokens use a different network, identified as Ordinals. Through this ordinals, data is being inscribed on satoshi. So, we can say that BRC-20 tokens has to do with “minting” satoshis in a bid to hold data about the whole collection of tokens. Certainly, this token standard is fungible. This thus means they can be traded with other tokens of the same standard.

Worthy of note that this token standard was launched in March, 2023. It was reportedly developed by an anonymous developer, identified as Domo. According to findings, the first BRC-20 token standard is ORDI. It reportedly started as a meme and currently boasts of over $500 million market cap. Other BRC-20 token standard include MEME, VMPX, BANKBRC, and PEPEBRC. Today, BRC-20 trading is now supported by numerous crypto exchanges, including Gate.io and many more.

Pros of BRC-20 Tokens

One of the Pros of BRC-20 dwells in its efficient security. Since it runs on the Bitcoin network, this token standard enjoys the efficient security availed by the network. Recall that Bitcoin employs a PoW consensus mechanism with a huge number of miners to secure its network. So, BRC-20 leverages this security framework to its advantage.

Another notable Pros lies in its native compatibility. The BRC-20 tokens remain compatible with its native network, Bitcoin. This thus makes it easy for developers on the Bitcoin network to integrate the tokens without any hitches.

More so, BRC-20 tokens remain fungible. By virtue of this, they can be traded with other tokens of the same standard.

Cons

The major Cons associated with this token standard is the surge in its transaction fees caused by the growth in its transaction activities.

Top BRC-20 Tokens

Since the inception of its existence about two months ago, we’ve witnessed the launching of various tokens on the Bitcoin network. Presently, ORDI and MEME are two leading BRC 20 tokens in the crypto market.

ORDI

ORDI is a BRC 20 token, the coin is a Decentralized Finance project that offers users a passive means of income. The token provides investors with staking, liquidity provision, and yield farming investment options. It’s widely regarded as an investment opportunity that poses high returns. ORDI offers investors the privilege of diversifying their portfolio and engaging in the DeFi space. Mainly, the token provides a decentralized approach of solving problems synonymous to the traditional finance sphere.

MEME 

MEME is another prominent  BRC-20 token that pays homage to Meme. Initially, Meme is an NFT collection initially launched on Ethereum. It features pineapple-themed artworks, the token is one of the numerous meme-inspired tokens that have been deployed by users via BRC-20 and Ordinals since March 2023.

Recent Surge

Lately, tokens created on Bitcoin through the Ordinals protocol have enjoyed a great market performance of late. Presently, the market cap of BRC-20 tokens has exceeded $1 billion. The growth underlined the swift growth of an emerging asset preference relating to the most vulnerable cryptocurrency. 

ORDI is leading the surge, and it has recorded a market cap worth more than half a billion dollars. Also, despite being in existence for a few weeks, the coin has recorded outstanding growth which saw the price of the token soar by over 23,000%.

More so, the recent surge emanated after Gate.io listed some of the BRC-20 tokens. With that, the cryptocurrency exchange provided investors with an avenue for trading them. In return, their increasing trading activity has helped the transaction rate on Bitcoin.

Conclusion

However, these tokens are struggling with some challenges of late. Transactions involving these tokens take much time to process and require a high transaction fee. This is due to high congestion on the BTC network. Despite the shortcomings, BRC-20 tokens have managed to attract holders within the short period of their existence. Though, the dynamic nature of the crypto space will surely birth solutions to these issues relating to BRC-20 tokens.

Read More :

Olaleye Komolafe
Olaleye Komolafe
Olaleye is a professional reporter with vast experience in web3, cryptocurrencies, and NFT journalism. He enjoys writing about the evolving metaverse sphere and the prevalence in the crypto sphere. Notably, some of his contents have been published in numerous international publications. Away from the crypto world, Olaleye is a political scientist and a lover of football

Most Popular