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Bitcoin’s BRC-20 token standard has emerged as the latest phenomenon within the cryptocurrency landscape, particularly following the recent surge of the Pepe (PEPE) memecoin. To date, 8,500 distinct tokens have been created utilizing the BRC-20 standard, with a significant portion of these being memecoins, including PEPE and Memetic (MEME).
BRC-20 is an experimental token standard on the Bitcoin (BTC) blockchain, inspired by Ethereum’s ERC-20. It enables developers to generate and transfer fungible tokens through the Ordinals protocol.
While it draws inspiration from ERC-20, the BRC-20 token standard is fundamentally different from its Ethereum-based equivalent. BRC-20 tokens do not utilize smart contracts, and the standard necessitates a Bitcoin wallet for the minting and trading of these tokens.
The BRC-20 token standard was introduced in early March by an anonymous on-chain analyst known as Domo. The aim was to facilitate the issuance and transfer of fungible tokens on the Bitcoin blockchain. Over the past month, the market capitalization of BRC-20 tokens has surged, currently standing at $120 million, reflecting a 600% increase in just one week.
BRC-20 tokens marketcap. Source: Ordinals
The BRC-20 token activity has significantly overshadowed the original volume of Bitcoin transactions on the blockchain. Between April 29 and May 2, BRC-20 transactions accounted for over 50% of the activity, surpassing standard BTC transactions.
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The peak volume of BRC-20 transactions occurred on May 1, reaching 366,000 transactions, while the total number of transactions on the network was 2.36 million.
BRC-20 tokens transaction volume. Source: Dune
In conjunction with the increase in BRC-20 transactions, transaction fees have escalated due to the heightened token activity. Since its launch in late April, the network has produced an additional 109.7 BTC in transaction fees for miners.
BRC-20 tokens total fees. Source: Dune
The memecoin phenomenon has been a significant subject on the Ethereum blockchain; however, with the advent of the BRC-20 standard, a comparable trend is now evident on the Bitcoin blockchain. This memecoin excitement has also resulted in a notable increase in Ethereum network gas fees, contributing to congestion on the network.
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