The age of Ordinals continues, and if you blink, you just might miss it. As Bitcoin recovers from its previous blow-off top, and everyone that bought above the current price licks their wounds, refusing to be exit liquidity for the second time, grifters, I mean builders and exchanges alike, are looking for new narratives to encourage you, the retail investor to take a second stab at it.
That narrative started to take shape with “digital artefacts”, which were NFTs on Bitcoin, but because you pay for limited block space, it somehow makes the idea more valuable than previous attempts at NFTs. The newly formed inscriptions market sure did drum up considerable excitement and, with it, a spike in fees before minting dried up and reselling your monkey JPEGs sitting in witness data couldn’t find a market buyer.
So crypto bros went back to the drawing board, and we saw the launch of the unregistered securities market with BRC-20 tokens, ORC-20 tokens and STAMPS. The frenzy, while brief, annoyed many a Bitcoin user as fees spiked on-chain as degen traders aped in to mint these tokens on the Bitcoin blockchain, but after minting, you sat with the same issue, a lot of sellers and very few buyers coming in late looking to be exit liquidity.
Too many weak hands and not enough exit liquidity.
Now what do you do if you’ve spent a lot on fees to create these tokens, but no one wants to buy them? You have to give them the incentive to purchase tokens, and what greater incentive is there in the modern world today than the promise of passive income?
People want the promise of wealth without work, so drumming up a convoluted system that attempts to give you the feeling of risk-free returns is the next step. We saw this with DEFI tokens, yield farming and staking coins in the altcoin market, so why not port it over to Bitcoin?
It was only natural after migrating NFTs and ICOs, wasn’t it? So that’s what you’re getting.
That’s right, ladies and gentlemen, boys and girls, step right up to the greatest show in crypto-town – the miraculous BRC-30 tokens! Ah, you’ve heard of BRC-20 tokens, haven’t you? Well, forget ’em. They’re yesterday’s news. BRC-30 is where the real spectacle is.
These tokens are the majestic unicorns of the crypto world. Yes, Susan, it slices, it dices, and it promising yield baring staking pools that will make your crypto wallet fatter just by doing nothing. It’s like growing money on trees, but digitally!
Exchanges: The grand ringmasters or benevolent puppet masters?
Firstly, let’s give a standing ovation to our dapper ringmasters of the crypto circus, the exchanges! They have embraced the BRC-20 tokens like a rambunctious toddler with a shiny new plaything. They know these implementations are fundamentally flawed and that on-chain markets would never be able to manage any kind of scale, so these BRC-20 tokens would always end up trading on centralised exchanges where traders would rather pay exchanges fees versus mining fees.
We’ve seen a host of exchanges adding support for BRC-20 tokens, which showed up this year but couldn’t be bothered to add support for Lightning or Liquid, which have been running for several years now, which shows you where their priorities lie.
BRC are like any other token on any other blockchain; in fact, I would go as far as to say the altcoin chains have a better product, with standardised executable contracts, instead of JSON files stuffed into the chain that cannot be processed without the ordinals protocol on top of it.
Why the interest in a new token standard?
BRC-20 tokens are simple static files representing tokens and inscribed with a serial number attached to Satoshis; they don’t do much else but fetch a premium on secondary markets, that’s the extent of the innovation, and eventually, minters and traders would grow tired of it, as they keep minting more and diluting the tiny market.
To give BRC-20 tokens more functionality, a staking parameter was proposed but has no been formalised by the Crypto exchange OKX.
They have introduced BRC-30, an extended version of the BRC-20 proposal (a fungible token standard made explicitly for the Bitcoin blockchain) that incorporates BRC-20 design principles while introducing functionalities for staking operations such as depositing, minting, and withdrawing. Don’t get too carried away by the wording it’s literally additional parameters added to a JSON file.
| Key | Required? | Description |
|---|---|---|
| p | Yes | Protocol: Helps other systems identify and process brc-30 events |
| op | Yes | Operation: Type of event (deploy, deposit, mint, withdraw, transfer) |
| t | Yes | type: type of earning(pool, fixed). pool: share earning with all pool deposits. fixed: earn solo,and have a fixed rate. |
| pid | Yes | 10 bytes for identity pool id |
| stake | Yes | ticker: 4 letter identifier of the brc-20,”btc” for special |
| earn | Yes | ticker: 4-6 letter identifier of the brc-30,”btc” for special |
| erate | Yes | distribution rate every second |
| dmax | Yes | distribution max amounts |
| total | Yes | distribution total |
| only | Yes | assets only deposit this pool, must be yes |
| dec | No | decimal precision of earn token, default: 18 |
This proposal introduces a staking mechanism within the Bitcoin network specifically tailored for BRC-20 tokens or Bitcoin.
With the introduction of BRC-30, users can now stake their own BRC-20 tokens or bitcoin and receive BRC-30 tokens in return. BRC-30 tokens are an extension of the functionality of BRC-20 tokens, with an added description of the staking protocol. In this way, BRC-20 token holders can be rewarded for putting their digital assets to work, demonstrating their commitment to the community, and participating in the Bitcoin network.
BRC-30 protocol is open-source and available for all developers to build upon.
The introduction of BRC-30 and its staking functionalities provide BRC-20 token holders with additional opportunities to engage with their digital assets and earn passive income. Furthermore, staking incentivises users to hold onto their assets, potentially reducing selling pressure on the market and contributing to a more stable token ecosystem.
“We’re thrilled to have proposed and pioneered the BRC-30 standard to enable Bitcoin and BRC-20 token staking. With the OKX Wallet soon to incorporate BRC-30 support, users will be able to access Bitcoin staking and earn opportunities across multiple-chains. With the Bitcoin ecosystem seeing an explosion of new development, we’re proud to work with developers and projects across the community to contribute to the growth of the wider ecosystem.”
– OKX Chief Innovation Officer Jason Lau
All these tokens do serve as their personal marionettes, creating a puppet show that gives the exchanges more control while encouraging everyone to entrust their cherished assets with them. It will allow exchanges to secure Bitcoin liquidity for their trading desks and pay out those stakers in useless tokens.
While the staking option would be conducted on-chain, exchanges know very few people will bother to execute this type of transaction on-chain, especially when fees are high, so instead, they’ll hand over funds to staking services like exchanges to net their imaginary yield in these secondary market assets.
Let’s drive the bus, just ’cause we can
BRC-30 tokens are another way to create incentives that aren’t part of the Bitcoin consensus. By creating this secondary market with its own assets in circulation and distribution/issuance policy, you can slow down or increase demand for Bitcoin at certain times. Consider BRC-30 tokens as a new interventionist policy that can attract capital to the market with empty promises of profit.
They’re like the government of the crypto world, looking for a way to inject easy money into the economy as they see fit– swooping in to adjust and manipulate, all for the “greater good”. But instead of creating a misalignment of incentives and misallocation of capital.
The pied piper of passive income
The real circus act, however, is the golden promise of passive income. Ah, the dream of every hardworking investor – earning while sleeping. You can be sure once these BRC-30 tokens roll out projects and exchanges will offer all sorts of tasty incentives, high-interest rates or teaser rates to try and get you to buy into their token or put capital to work on their exchange.
But remember, it’s like a mirage; you’re not earning Bitcoin, you’re earning satoshis, tied to a secondary asset that you hope will have a market of greater fools you can sell into in the future. If the token you’re banking on collapses, you will still be left with the underlying satoshis; it just might end up being a very expensive purchase of satoshis you could have otherwise picked up for less than $10.
The great shitcoin distribution show
Finally, we have the pièce de résistance – the new shitcoin distribution model. It’s as if BRC-30 tokens have taken the age-old saying “sharing is caring” a bit too seriously. They just love to give out new tokens, and because they only cost on-chain fees and the required amount of Satoshis to inscribe to create these tokens, they can keep creating them as long as people are willing to accept them.
It’s like a magic show where the magician keeps pulling rabbits out of a hat, except here, the rabbits are tokens. And the more you stake, the more rabbits…err…tokens you get. Talk about an endless magic show that hopes to use sleight of hand to leave your pockets empty.
The world of BRC-30 tokens is indeed a wondrous spectacle, filled with promises of easy income and endless tokens. To the Bitcoin maxi’s warning others to steer clear, if they ignore your warnings, let them. Just remember to grab some popcorn and keep your sense of humour handy. After all, who doesn’t enjoy a good circus?
Do your own research.
If you want to learn more about BRC-30 on Bitcoin, use this article as a jumping-off point and don’t trust what we say as the final say. Take the time to research other sources, and you can start by checking out the resources below.
A token of no appreciation.
So what do you think of BRC-20 and BRC-30 tokens? Will it take off and move more speculation to Bitcoin? Will the tooling used to create these standards become widely adopted? Or will this all fall flat on its face like previous attempts to add non-native assets on the Bitcoin base chain?
Let us know in the comments down below.
