BRC-20 Summer? The "V God" behind BRC-20: DOMO and the BTC Innovative Ecosystem

Author: Go2Mars Research

With the increasing popularity of BRC-20 in the market, more and more crypto researchers are turning their attention to this field. On April 28, 2023, we at Go2Mars Research also published our first original popular science article on the BRC-20 protocol: "Bitcoin NFT? The Ordinals Protocol and BRC-20."

Since the publication of the article, the BRC-20 related ecosystem has become increasingly prosperous. Therefore, we turn our attention to the promoter of the BRC-20 ecosystem, @domodata, to unveil the mysterious figure behind the Ordinals protocol, the "V God."

Ordinals Protocol: The Era of Satoshis in Bitcoin

With a market capitalization of $545.7 billion, Bitcoin is undoubtedly the number one asset in crypto. Although Bitcoin is not Turing complete and does not have the strong scalability for ecosystem development like Ethereum, it is precisely for this reason that it has maintained its core attributes for over a decade: decentralization, free trade, and value. The secure and simple Bitcoin is just like the title of Satoshi Nakamoto's article, "Bitcoin: A Peer-to-Peer Electronic Cash System."

The emergence of the Ordinals protocol has opened up greater space for the Bitcoin ecosystem. The Ordinals protocol numbers and annotates the smallest unit of Bitcoin, "satoshi," making each originally homogeneous satoshi a unique "NFT." 1 BTC = 100 million satoshis, and the number of satoshis is as limited as the total amount of Bitcoin. Bitcoin has officially entered the "Satoshi Era," which can be likened to the era of smart contracts on Ethereum. Bitcoin has gained higher scalability, allowing for asset issuance and the establishment of a more complete ecosystem. Currently, the most important aspect of the Bitcoin ecosystem, which established its initial ecosystem just two months after its proposal, is the BRC-20 protocol.

A Long-Awaited Carnival: The Market Heating Up for BRC-20

The BRC-20 protocol is a technology that utilizes the Ordinals protocol to create and trade fungible tokens (FT) on the Bitcoin blockchain. It uses JSON data to deploy token contracts, mint tokens, and transfer tokens.

As of May 8, the market shows that there are currently over 14,000 BRC-20 tokens, with a total market capitalization reaching $540 million. The trading volume in the past 24 hours has exceeded $10 million. Although this is not high relative to the entire crypto market, the growth rate is quite impressive.

This has also ignited the Bitcoin market. On the 7th, the total network fees for Bitcoin reached 403.91 BTC, while just a month ago, on April 8, the daily network fees were only 21.89 BTC, an increase of nearly 18 times. The first token issued under the BRC-20 standard, Ordi, saw its price rise from $0.1 to $16.99 in just two weeks.
On the other hand, the booming BRC-20 market has also led investors to pay more attention to the concept of Bitcoin NFTs.

Compared to the essence of ERC-721 NFTs, which are images stored on IPFS servers secured by smart contracts, BRC-20 inscribed NFTs are truly fully stored on-chain. This is one of the reasons why some Bitcoin enthusiasts and decentralization practitioners are so excited. The implementation of the protocol is based on the immutable data of Ordinal inscriptions, and the stored data will be permanently retained on the Bitcoin chain.

Domo and BRC-20

The founder of BRC-20, domo@domodata, describes himself on Twitter as "Terminally on-chain || Dune wizard || Alf bot || Crypto @ trad payments leader," with the most important aspect reflected in the latter part of his description, namely being a leader in crypto trade payments.

BRC-20 is an experimental fungible token standard proposed by him based on the Ordinals protocol, and it is indeed practicing his description—true decentralization, achieving the issuance of crypto assets using Bitcoin.

Of course, in his white paper, domo clearly states that BRC-20 is just an interesting experimental standard that demonstrates how anyone can create an off-chain balance state using inscriptions, although it is not considered a standard for the interchangeability of Bitcoin and ordinals. He encourages the Bitcoin community to refine the standard design and optimize it until a general consensus on best practices is reached.

On March 6, he focused on the shadow of the conflict between Blur and Opensea, and the expansion of the market by Ordinals. With the explosive popularity of ordinals, fierce competition for infrastructure is underway. Among them, Ordinals Market uses existing Ethereum infrastructure and technology developed by Emblem Vault to facilitate Bitcoin inscription trading on the Ethereum blockchain, circumventing the slow speed and poor experience of the Bitcoin network, while others adopt novel Bitcoin-native solutions.

On March 9, he informally proposed the Bitcoin "BRC-20" and interchangeability experiment. Under this logic, anyone can deploy, mint, or transfer using ordinal inscriptions. Like other similar projects, it follows a "first come, first served" rule.

By browsing his previous tweets, we can see that domo pays attention to some interesting ERC-721 NFT projects, sometimes retweeting project tweets and engaging with interesting memes (including Trump NFTs). He holds CryptoPunks and often shares insights on applications and ideas related to ordinals.

Bitcoin Innovation: BOP and ORC-20, BRC-721

In addition to Domo, many developers are actively promoting innovation in Bitcoin. Hugo, a developer from Hirosystem, also experimentally proposed a new protocol, BOP, after the introduction of BRC-20, which stands for Bitcoin Ordinals Protocols. BOP is also an experimental standard used to describe protocols that use ordinals on Bitcoin. His idea is to explore whether a lighter data structure than JSON can be used to optimize fees and block space. The BOP protocol also details the methods from minting to transferring, offering greater scalability compared to BRC-20.

Moreover, OrcDAO has launched the ORC-20 protocol. ORC-20 is an open standard for ordinal tokens on the Bitcoin network, aimed at enhancing the functionality of the popular ordinal token standard BRC-20. It is designed to be backward compatible with BRC-20 to improve adaptability, scalability, and security, while eliminating the possibility of double spending. Of course, this is also an experimental project.

Additionally, BRC-721: Ordinals Collection Protocol is quite attractive. It is a standard interface for verifying the authenticity of Bitcoin ordinal collections. The root of the problem with the current Ordinal protocol lies in the fact that ordinal theory does not clearly specify how to compose projects into collections, leading to various different handling methods.

However, these methods are often centralized and rely on specific services or wallets used. This situation limits the development potential of the Ordinal ecosystem. Therefore, it is necessary to find a decentralized and trustless method for creating and verifying collections.
The BRC-721 protocol introduces a decentralized and trustless method for creating and verifying collections, similar to the ERC-721 standard on the Ethereum blockchain. By providing a single source of truth, it simplifies the process of creating and verifying collections without requiring upfront fees.

Innovative Expansion of the Bitcoin Ecosystem

The core function of Bitcoin lies in value storage rather than execution. The high development of the Ethereum ecosystem comes from its EVM and smart contracts. Therefore, how to execute complex operations on the Bitcoin network has become the biggest obstacle to the prosperity of the Bitcoin ecosystem. As more and more developers and researchers turn their attention to this purest cryptocurrency, we have reason to believe that the BTC ecosystem will gradually thrive.

Of course, whether such development on the Bitcoin network contradicts BTC's original vision and what impact it will have on BTC still requires us to wait for time to answer. As Go2Mars Research, an investment research institution in the field of blockchain technology and applications, we will continue to track the BTC ecosystem, analyze its development trends and influencing factors, and provide valuable information and advice to our readers.

References:

[1] Ordinalswallet: https://ordinalswallet.com/

[2] Ordi: https://brc-20.io/token?n=ord

[3] Ordinals handbook: https://docs.ordinals.com/

[4] BRC-20: https://domo-2.gitbook.io/brc-20-experiment/i

[5] Domo @domodata: https://twitter.com/domodata

[6] "Bitcoin Ordinals Protocols": https://github.com/hugocaillard/bop

[7] Hugo Clrd @Cohars: https://twitter.com/Cohars/status/1634595882854240256

[8] "About ORC-20": https://docs.orc20.org/

[9] "BRC-721: Ordinals Collection Protocol": https://www.brc721.com/