BRC-20 Market Cap Hits $700M as Gate.io Enables Trading and Deposit Support
BRC-20 is a new token standard built atop Bitcoin that is rapidly gaining traction. Created as an experiment by a pseudonymous on-chain analyst named Domo, BRC-20 allows for the creation of token contracts that exist directly on Bitcoin’s blockchain. So, what was initially just an exploratory idea has now morphed into a $700M market with thousands of tokens and counting.
Although named similarly, Bitcoin’s BRC-20 differs from the Ethereum-based ERC-20, especially in the way that ERC-20 supports smart contracts while BRC-20 does not. However, BRC-20 is modelled similarly to ERC-20 in that it enables the creation and transfer of fungible tokens, albeit on Bitcoin rather than Ethereum.
What is BRC-20?
BRC-20 spawned out of the Ordinals protocol that gained attention in early 2023 for popularizing NFTs on Bitcoin. Ordinals use data attached to satoshis, known as inscriptions, to create NFTs. BRC-20 uses the same process but to create a token contract for fungible tokens. These BRC-20 tokens can then be traded or transferred.
While many of the new BRC-20 tokens created in the recent surge are memecoins, this new standard could still have some benefits over existing ones. For starters, it’s built upon Bitcoin’s proof-of-work blockchain, regarded for its high security and decentralization. Additionally, because the standard is built on Bitcoin without modification, it can seamlessly integrate into Bitcoin’s ecosystem.
While BRC-20 has the advantage of being Bitcoin-based, it is still bound to the limitations of the network it’s built upon, especially when compared to Ethereum’s ERC-20. At the core, the BRC-20 ecosystem lacks developers as its relatively new and experimental. Further, Bitcoin is more used for its peer-to-peer transactions or as a store of value. In contrast, Ethereum is built specifically for smart contracts, posing challenges for BRC-20 in supporting more complex functionality and for user adoption.
Where to trade BRC-20 tokens?
Despite its popularity, the relatively new status of BRC-20 means that several platforms and wallets are still racing to support the standard. However, Gate.io is the first major centralized exchange to announce support for BRC-20 trading, deposits, and withdrawals.
Following the announcement of BRC-20 support, Gate.io announced spot and contract market support for Ordinals (ORDI) tokens– not to be confused with Ordinals as a protocol. The ORDI token is the largest BRC-20 token by market cap, sitting at around $500M as of writing.
What lies ahead for BRC-20?
BRC-20 may have a bright future, as fungible and non-fungible tokens are mostly unexplored territory on Bitcoin apart from a few previous attempts that failed to gain traction. The rapid popularity of the relatively new BRC-20 and Ordinals shows rising interest in expanded uses for the Bitcoin blockchain. Whether it be BRC-20 or the next Bitcoin experiment, users, developers and project creators are attracted to newly unlocked functionality on Bitcoin.