Thanks to the Ordinals protocol, in March 2023, a developer known as Domo created the BRC-20 token standard. To the dismay of users who worried that a wave of memecoins and NFTs would flood the network, Domo’s creation allowed anyone to launch their own Bitcoin tokens.
Now, Bitcoin purist’s worst fears have been confirmed. Amid a red hot market for BRC-20 tokens like ORDI, SATS, and NALS, Ordinals transactions have surged, clogging the Bitcoin network and causing fees to soar.
At press time, the combined market capitalization of all BRC-20 tokens had climbed around 50% in 24 hours, increasing to over $600M.
With a capitalization of around $450M, ORDI dominates the market, accounting for roughly 75% of its total value. In the past week, the original Ordinals token has jumped by over 300%.
Other trending tokens include SATS and NALS, which have clocked weekly gains of 150% and 230% respectively thanks to $1M+ daily trading volumes.
Although the Ordinals protocol first introduced the concept of inscribing data onto individual satoshis in 2022, it was the BRC-20 token standard that paved the way for Bitcoin-based meme tokens.
Inspired by Ethereum’s ERC-20 standard, when Domo created the first BRC-20 token, they gave it the ticker ORDI, set a maximum supply of 21M, and made the first 1000 inscriptions, turning previously indistinct satoshis into a new class of tokens.
Once the first Ordinals tokens were minted, it didn’t take long for the idea to catch on. By the time Domo got around to publicizing the concept, another Ordinals watcher had already deployed the second BRC-20 token – MEME.
Since then, all 21M ORDI have been minted and the token has been listed on major exchanges like Binance, helping it to accrue a market capitalization of over $424M.
To date, 2,270 different BRC-20 tokens have been deployed and are held by over 672,000 wallets. In addition to trending memecoins, by inscribing satoshis with image data, the standard has also fueled the rise of Bitcoin-based NFTs.
While Dom created the standard as a “fun experimental” which “by no means should be considered THE standard” for minting tokens on Bitcoin, BRC-20 has now eclipsed all other applications of the Ordinals protocol.
But while it might be the hottest crypto trend of the moment, critics have claimed that the BRC-20 craze is unsustainable.
In a recent interview with CoinTelegraph, Jan3 CEO, Samson Mow, said he expects BRC-20 tokens will fade away in a few months. Observing that network fees have skyrocketed as a result of recent Ordinals transactions, he said “there is no way this can be sustained.”
According to Mow, the “hype-driven” BRC-20 trade mirrors the situation on Ethereum and other chains where most Memecoins and NFTs “fade away once the issuers have made their money.”