Bitcoin’s BRC-20 token standard has become the latest trend in the crypto ecosystem, especially after the rise of Pepe (PEPE) memecoin in recent months. A total of 8,500 different tokens have been created using the BRC-20 standard, and most of these BRC-20 tokens are memecoins such as PEPE and Memetic (MEME).
BRC-20 is an experimental token standard in Bitcoin
Ethereum’s ERC-20 model of blockchain. It allows programmers to create and send fungible tokens via the Ordinals protocol.
Although modeled after ERC-20, the BRC-20 token standard is fundamentally different from its Ethereum-based counterpart. BRC-20 tokens do not use smart contracts. Token Standard requires a Bitcoin wallet to print and trade these tokens.
The BRC-20 token standard was created in early March by an anonymous on-chain analyst named Domo. The goal was to make it possible to issue and exchange fungible tokens on the Bitcoin blockchain. The market cap of BRC-20 tokens has exploded over the past month and is currently at $120 million, a 600% increase over the past week.
BRC-20 Token Market Cap. Source: Ordinals
The BRC-20 token craze has also reduced the number of actual Bitcoin transactions on the blockchain. The number of BRC-20 transactions on the Bitcoin blockchain increased by more than 50% between April 29 and May 2, surpassing normal BTC transactions.
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BRC-20 token volume peaked at 366,000 transactions on May 1, bringing the total number of transactions on the network to 2.36 million.
Transaction volume of BRC-20 tokens. Source: Dune
Along with the increase in BRC-20 transactions, transaction fees have risen due to the new token functionality. Since launching in late April, the network has generated an additional 109.7 BTC in transaction fees for miners.
Total fee of BRC-20 tokens. Source: Dune
The memecoin frenzy has been a notable topic on the Ethereum blockchain, but with the rise of the BRC-20 standard, a similar trend is being observed on the Bitcoin blockchain. The Memecoin craze has led to a significant increase in Ethereum network gas fees, causing network congestion.