Bitcoin Embraces BRC-20 Tokens as BRC20-Based SHIB, PEPE Market Gains Traction
A group of developers has made a significant stride in the decentralized finance (DeFi) space by deploying Uniswap's smart contracts onto the Bitcoin network. The move aims to tap into the growing popularity of BRC-20 tokens and foster the development of a vibrant DeFi ecosystem.
Known as Trustless Market, the protocol has gained remarkable traction, with daily volumes reaching $500,000 and attracting over 2,000 users. Liquidity providers on the platform have the opportunity to earn a 2% share of all swaps conducted within the network.
While most of the tokens traded on Trustless Market are meme coins rather than tokens designed for sophisticated DeFi applications, this marks an important starting point.
The developers behind Trustless Market are determined to expand the usability of Bitcoin beyond being a mere currency. They have previously explored applications in the fields of art and artificial intelligence (AI), making DeFi the natural progression.
Despite being in its early stages, Trustless Market is reminiscent of the early days of Uniswap in 2018, with the developers finding excitement and potential in their endeavours. DeFi applications rely on automated smart contracts to offer various financial services like lending and borrowing.
Data from DefiLlama reveals that nearly $47 billion worth of tokens is locked in such protocols.
Previously, Bitcoin's involvement in DeFi was limited to tokenized representations of Bitcoin on other blockchains such as Ethereum or Solana. However, the recent introduction of token standards like "Bitcoin Recent for Comment" has opened the doors for native token issuance and DeFi applications on the Bitcoin network. This development has spurred the creation of digital artwork and meme tokens on Bitcoin in recent weeks.
According to OrdSpace,
An analytics platform tracking BRC-20 data, there are currently over 11,000 tokens issued on Bitcoin available on the open market. These tokens have a combined market capitalization of $500 million, though it has seen a decline from the previous figure of $1.5 billion.
Among the BRC-20 tokens, Ordi (ORDI) from the Ordinals marketplace holds the highest market capitalization of $400 million, with 8,300 unique token holders.
Ordi claims the distinction of being the first BRC-20 token deployed on Bitcoin, adding to its appeal among investors. Another notable BRC-20 token is Pepe (PEPE) on Bitcoin, separate from its Ethereum counterpart, with a market capitalization of $17 million.
Additionally, Bitcoin's own version of Shiba Inu (SHIB) boasts a $3.7 million market capitalization, albeit significantly smaller than the original SHIB on Ethereum with $5.5 billion.
Trustless Market stands as one of the pioneering protocols working towards the development of the Bitcoin ecosystem. However, this expansion has led to a spike in transactional fees, with Bitcoin users paying over $17.42 million in fees within the past 24 hours.
Despite this challenge, proponents like punk3700 believe that such obstacles are merely a stepping stone to wider adoption, emphasizing that utility and use cases will drive the infrastructure upgrade in the long term.
Trustless Market's deployment of Uniswap contracts on Bitcoin marks a significant step in the advancement of the DeFi ecosystem. With the growing interest in BRC-20 tokens and the expansion of tokenized assets on Bitcoin, the cryptocurrency landscape continues to evolve.
While challenges like transaction fees exist, the industry remains optimistic about the long-term potential and the possibilities that lie ahead.
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