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A swift upsurge in the transaction volume of Bitcoin-based meme tokens has recently transpired, culminating in over 100 BTC ($2.8 million) disbursed in transaction fees for these token transfers.
New Frenzy: BRC-20 Tokens
Token transactions on the Bitcoin network have eclipsed conventional Bitcoin transactions in the past 48 hours. A relatively novel occurrence, Bitcoin-based tokens initially materialized with Ordinals, an endeavor to mine NFTs on the Bitcoin network. This underlying principle was subsequently employed to devise a standard encompassing Bitcoin-based tokens, dubbed BRC-20. This standard was, and remains, instrumental in issuing meme tokens such as Ordinals, PEPE, and others. Presently, these tokens are burgeoning, substantially amplifying network activity.
Crypto Koryo, an anonymous cryptocurrency analyst and trader on Twitter, revealed that over 8,500 distinct tokens have been minted on the Bitcoin network thus far. “The allure of BRC-20 stems partly from the robust security afforded by the Bitcoin Blockchain. Communities coalesce around tokens with mutual incentives, and everyone possesses an equitable opportunity to mint currency. For the time being, growth persists, notwithstanding the technical shortcomings and meme-centric disposition,” they elaborated.
The BRC-20 standard permits the issuance of tokens that can be exchanged akin to NFTs on Bitcoin, predicated on metadata fragments affixed to Satoshis, Bitcoin’s smallest unit.
The Ascent of BRC-20 Based Tokens
From April 29 to May 2, transactions involving tokens utilizing the BRC-20 token standard, a criterion for tokens constructed on Bitcoin, constituted 42 percent to 54 percent of all transactions on the Bitcoin Blockchain. This percentage excludes Bitcoin transactions on the Lightning Network.
Data furnished by Crypto Koryo indicates that on May 1, BRC-20 tokens claimed the most substantial portion of Bitcoin’s block space, at 53.7 percent.
Concurrent with the escalating percentage of BRC-20 transactions, transaction fees generated by the token standard have experienced a parabolic ascent since late April, attaining approximately 27.73 BTC yesterday. Over 100 BTC in additional fees were remitted to Bitcoin miners for these tokens, amounting to more than $2.8 million.
Daily Transactions on the Bitcoin Blockchain Establish an Unrivaled Record On May 2, we disclosed that the seven-day moving average of daily transactions on the Bitcoin blockchain attained an all-time zenith on April 29. The on-chain metric established a record on that date, exceeding 408,000 transactions. Since then, primarily propelled by meme token demand, the metric has continued its upward trajectory, achieving a new record pinnacle of nearly 500,000 on May 1.
While meme token trading is a nascent phenomenon on the Bitcoin network, it is a quotidian event on the majority, if not all, alternative blockchains. For instance, a token named Pepe (PEPE), founded on Ethereum, has recently emerged and captured the limelight, amassing a market capitalization of $500 million in a mere two weeks.
