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The demand for "Bitcoin Request for Comment" or BRC-20 tokens, which are created using Ordinals and stored on the Bitcoin base chain, has surged significantly, causing their market value to increase by several hundred percent.
According to data compiled by Ordinals-builder Ordspace, the collective market capitalization of over 8,800 BRC-20 tokens was $137 million at the time of writing. This represents a remarkable surge of 682% compared to the previous week's market cap of $17.5 million. However, there was a brief moment early on Tuesday when Ordspace reported the total market cap to be $2.93 billion. Ordspace clarified that the figure was not accurate and likely arose from low liquidity in some of the tokens.
The BRC-20 token standard was created by a pseudonymous on-chain analyst named Domo in early March to simplify the issuance and transfer of fungible tokens on the Bitcoin blockchain. This experimental invention was introduced a few weeks after the launch of the Ordinals Protocol, which enables users to inscribe digital art references into small transactions on the Bitcoin blockchain. Together, these innovations have sparked excitement and investment in the realm of tokenization on the Bitcoin blockchain.
"Ordinals on Bitcoin have had unintentional consequences. Of these is the invention of the BRC-20 fungible token standard. It’s now possible to create fungible tokens on BT," pseudonymous analyst and yield farmer Dynamo DeFi said in the latest edition of the weekly newsletter. "Since inception, BRC-20s have accounted for nearly 6% of all Bitcoin activity."
Although the BRC-20 standard may sound similar to the well-known ERC-20 standard, there are significant differences between the two. Notably, the BRC-20 standard does not support interaction with smart contracts, while the ERC-20 standard is the technical standard for creating fungible tokens on Ethereum, which is renowned for its smart contract capabilities.
"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," crypto exchange Binance said in an explainer.
The majority of active BRC-20 tokens belong to the category of meme coins, which are cryptocurrencies that have their origin in internet memes or humorous characteristics. As of the time of writing, the three most popular coins that have been minted using the BRC-20 standard are ORDI, OG, and PEPE.
Mark Jeffrey, of Boolean Fund, has suggested that the introduction of BRC-20 tokens has made cryptocurrency exchanges unnecessary.
"With BRC-20's, the Bitcoin blockchain is the exchange. There is no Binance, no Coinbase required. Just a Bitcoin wallet. You create, buy and sell with sats. Bitcoin is now gas," Jeffrey tweeted over the weekend, noting the rise in the market cap of BRC-20 tokens.
Source Coindesk
