1. BRC-20: A fungible token standard on Bitcoin
BRC-20 is the earliest token standard in the Bitcoin ecosystem. It draws on Ethereum's ERC-20 standard and aims to issue and manage tokens through the Bitcoin network. The technical basis of BRC-20 comes from the Ordinals protocol, and the token data is put on the chain through the Bitcoin inscription function.
Core Features
BRC-20 allows users to issue fungible tokens using the Bitcoin network and store token information in Bitcoin's UTXO model through inscription technology. The emergence of Ordinals has brought NFT-like applications to Bitcoin, while BRC-20 further expands Bitcoin's token issuance function and provides simple token transfer and management capabilities.
Advantages and limitations
Advantages: The biggest advantage of BRC-20 is its simplicity and reliance on the Bitcoin blockchain, which guarantees its security. Users can easily create and transfer tokens using the Bitcoin network’s infrastructure.
Limitations: The BRC-20 standard is relatively simple and lacks advanced features of smart contracts. It can only process simple token transactions on the chain, but cannot implement more complex application scenarios such as automated market makers (AMMs), lending or staking.
status quo
As can be seen from the chart, pizza, sats, and ordi tokens on BRC-20 have attracted a large number of users. For example, the pizza token has more than 99,000 holders and the trading volume is also very active. This shows that BRC-20 has a high acceptance in some communities, especially in the simple token and NFT markets.
Market heat
Currently, BRC-20 is still popular in the Bitcoin ecosystem, especially for those who want to simply create tokens or issue NFTs. However, as the technology develops, the limitations of BRC-20 may affect its future expansion potential.
2. ARC-20: Bitcoin-compatible smart contract token
ARC-20 is another token standard on Bitcoin, with a design concept similar to Ethereum's ERC-20, but its goal is to introduce smart contract functionality to Bitcoin. ARC-20 allows the creation of decentralized applications (dApps) on the Bitcoin network and manages the issuance and circulation of tokens through smart contracts.
Core Features
Smart contract support: Compared with BRC-20, the biggest feature of ARC-20 is its smart contract support. This allows developers to create more complex application scenarios on the Bitcoin network, such as DeFi platforms, decentralized exchanges (DEX), etc.
Compatibility: ARC-20 is also highly compatible with the existing Bitcoin infrastructure, allowing developers to deploy smart contracts without changing the underlying Bitcoin protocol.
Current situation and challenges
While ARC-20 offers more powerful features, its market adoption is relatively low compared to BRC-20. The Atomicals section in the chart shows several ARC-20 tokens, such as atom, quark, and realm, which, despite decent market activity, still have limited holders and trading volume relative to tokens from other protocols.
Market heat
ARC-20’s smart contract functionality gives it long-term development potential, but the market demand for it has not yet fully emerged. As more DeFi applications are developed, ARC-20 is likely to become an important part of the Bitcoin ecosystem in the future.
3. Runes: Bitcoin native token standard
Runes is a Bitcoin native token standard proposed by Casey, which aims to allow Bitcoin to support token issuance and management directly on Layer 1. Runes hopes to implement token operations through Bitcoin's native functions rather than relying on sidechains or other expansion solutions.
Core Features
Runes focuses on the security and decentralization of the Bitcoin mainnet, and attempts to make token issuance operations more lightweight and direct without relying on complex smart contract systems. This makes Runes more suitable for simple token issuance needs.
status quo
Compared with BRC-20 and ARC-20, Runes has a lower market acceptance. Although it proposes the idea of issuing tokens on the Bitcoin mainnet, its design is too simplified to meet the needs of more complex applications. Therefore, Runes currently has limited application scenarios in the Bitcoin ecosystem, and its future development potential remains to be seen.
Market heat
Currently, Runes has a low market popularity and has not yet formed a wide range of applications. Although it is innovative in concept, its simple design may limit its long-term development.
4. Fractal Bitcoin: The rising star of Bitcoin smart contracts
Fractal Bitcoin is a rising star in the Bitcoin ecosystem. It is based on the OP_CAT protocol and aims to introduce more powerful smart contract functions to the Bitcoin mainnet. Fractal is more than just a sidechain. Its core goal is to promote the expansion of smart contracts on the Bitcoin mainnet and enhance the programmability of the Bitcoin network by supporting token issuance, NFT and DeFi applications.
Core technology: OP_CAT
OP_CAT is the core of Fractal Bitcoin, which allows smart contracts to be executed on Bitcoin's Layer 1 without relying on off-chain indexers or third-party solutions. This means that the state of tokens, contracts, and transactions is maintained entirely on-chain, ensuring greater security and decentralization.
Advantages of Fractal
No indexer required: Compared with other token protocols, Fractal enforces token rules through Bitcoin scripts, without relying on off-chain data indexers, reducing centralization risks.
Smart Contract Support: Fractal supports complex smart contract functionality through covenants, which brings unprecedented flexibility to the Bitcoin network.
Market Status
Tokens in the Fractal ecosystem, such as Fractal Pepe, OP_CAT_Unity, and Fractal Bipolar, are gradually attracting market attention. Although the number of holders of these tokens is relatively small at present, as the functions of the Fractal platform are gradually improved, the market growth potential in the future is huge. For example, Fractal Pepe has attracted more than 6,000 holders, and tokens such as OP_CAT_Unity are also gradually increasing the number of holders.
Market heat
Fractal Bitcoin is currently gaining popularity in the market. With the gradual activation of OP_CAT on the Bitcoin mainnet, Fractal is expected to become one of the most important smart contract platforms in the Bitcoin ecosystem. In particular, Fractal provides a powerful and secure platform for developers who want to build more complex decentralized applications on the Bitcoin network.
5. CAT20 and CAT721: Token Standards for the Fractal Bitcoin Platform
CAT20 and CAT721 are token standards based on the Fractal Bitcoin platform, used for the issuance and management of fungible tokens and non-fungible tokens (NFTs), respectively.
CAT20: Flexible Token Standards on Bitcoin
CAT20 is Fractal Bitcoin's first token standard, which allows developers to define flexible token issuance rules and manage the minting and transfer of tokens through smart contracts. Unlike BRC-20, CAT20 does not rely on off-chain indexers, and all its rules are enforced on the chain through Bitcoin's smart contracts.
Advantages: CAT20 provides greater flexibility, allowing developers to design complex token issuance mechanisms, such as time-lock-based minting rules, limited issuance, and smart contract automation.
CAT721: An upgraded version of NFT
CAT721 is a token standard for issuing and managing NFTs. Unlike Ordinals NFTs, CAT721 provides more flexibility and scalability, enabling developers to create more complex digital asset management solutions.
Market Status
Although the market for CAT20 and CAT721 is still in its infancy, with the gradual development of the Fractal Bitcoin ecosystem, these token standards are expected to become important token management tools on Bitcoin in the future. The CAT721 token in the chart has shown certain market potential, and the number of holders is growing steadily.
6. Future Outlook: Which sector will be hotter?
Based on current market trends and technological developments, the sectors most likely to gain widespread attention in the Bitcoin ecosystem in the future include Fractal Bitcoin and CAT20/CAT721.
The Future of Fractal Bitcoin
As an innovative project in the Bitcoin ecosystem, Fractal Bitcoin is gradually showing its great potential. With the improvement of OP_CAT smart contract functions, Fractal Bitcoin may attract more developers and users and become the core platform for smart contracts and decentralized applications on the Bitcoin network. Especially for those projects that want to implement more complex applications on the Bitcoin network, Fractal Bitcoin provides a powerful and secure option.
Growth potential of CAT20 and CAT721
With the expansion of Fractal Bitcoin, CAT20 and CAT721 are expected to become the mainstream token standards on Bitcoin. Especially with the rapid development of NFT and DeFi markets, the application scenarios of CAT721 will become more and more extensive, while CAT20 can provide more flexibility and possibilities for decentralized finance and token management.
Summarize
Although other token standards such as BRC-20 and ARC-20 still have a certain market space, as the Bitcoin ecosystem gradually expands to more complex smart contracts and token management applications, Fractal Bitcoin will be one of the most noteworthy technology sectors in the future. $BTC $1000SATS $ORDI
