Bitcoin-based BRC-20 tokens push combined market value over $900M

Tokens created on Bitcoin through the Ordinals protocol have exceeded a total market value of $900 million, highlighting the rapid rise of an emerging asset niche on the most valuable blockchain.

Ordi memecoin lead the BRC-20 category with a fully diluted value exceeding half a billion dollars, based on data from websites brc-20.io and Ordspace. That’s after a 22,500% jump to $25 today from $0.11 at the beginning of April amid the ongoing memecoin mania.

Memecoins make up the majority of tokens created using BRC-20, a recently-developed token standard for Bitcoin using the Ordinals protocol. These Bitcoin-based tokens are comparable to ERC-20, the token standard on the Ethereum blockchain. Introduced by developed Casey Rodarmor in January, the protocol allows for indexing and monitoring of every satoshi, the smallest unit of Bitcoin, across the network. 

Currently, Ordi has a fully diluted market cap of $525 million considering a token supply of 21 million. The token became available for trading today on Gate.io, the first centralized crypto exchange to list the top BRC-20 token.

What is the Ordinals protocol on Bitcoin?

The Ordinals protocol allows developers  to assign a distinct identity or file onto every satoshi within the Bitcoin network, a process called inscription. This mechanism set the stage for the development of both fungible (interchangeable) tokens, like BRC-20 tokens, and non-fungible tokens (NFTs), which frequently showcase digital art. 

While the Ordinals core team devised a method for generating NFTs on Bitcoin, another pseudonymous developer named Domo introduced an experimental token standard built upon the Ordinals protocol called BRC-20 in March. This enabled users to issue fungible tokens like ordi and others with the help of incsribing specific files to satoshis.

Since then, the number of tokens created on Bitcoin using Ordinals has experienced a dramatic increase. In merely the past few months, over 14,000 tokens have been generated, and the trading activity surrounding these tokens has contributed to a substantial uptick in daily transactions on the Bitcoin network, going to a record high of 534,000, as per The Block data. Consequently, this has also led to a steep rise in network fees over the last week. 

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.