After BRC-20 and ORC-20, what is BRC-21?

Original title: "After BRC-20, ORC-20, what is BRC-21?" "

Original source: Odaily Planet Daily

With the explosion of BRC-20, some other assets built around the Bitcoin network Standards also started to emerge.

On May 7th, Alexei Zamyatin, the founder of the cross-chain interoperability project  Interlay, proposed to launch the BRC-21 standard to introduce Fully decentralized cross-chain assets and use them in the Lightning Network.

Interlay Labs also released the V 0.1 version of the BRC-21 token standard document. According to the description of the document, BRC-21 assets are still BRC-20 assets in essence, but unlike BRC-20 assets that are "born out of thin air", BRC-21 needs to be generated by locking assets on the initial chain (such as ETH, DOT , ATOM, DAI, etc.), in other words, BRC-21 standard provides a possibility to mint BRC-20 version ETH, DAI and other on-chain assets on the Bitcoin network.

From a technical point of view, the cross-chain of BRC-21 assets only needs to rely on three components to complete, and the whole process is expected to achieve complete decentralization:

1. Startchain smart contract: Responsible for processing coin minting and redemption operations on the Startchain.

2. Custom indexer (Custom indexer): responsible for verifying BRC-21 minting, transfer, redemption and other operations on the Bitcoin network, as well as the initial Smart contract state on-chain.

3. Bitcoin relay (BTC-Relay): As a light client on the Bitcoin network to achieve the effect of smart contracts, Bitcoin needs to be verified Transactions on the network contain context and are parsed.

Interlay Labs also demonstrated the deployment of BRC-21 assets in the document. It is worth noting how this is deployed on the Bitcoin network.

In general, the deployment of BRC-21 tokens is similar to the deployment of BRC-20 tokens, but there are some differences in details , such as:

1. The "max" field used to define the maximum supply is no longer mandatory, but optional, because The maximum supply of the original assets behind BRC-21 has generally been defined on the initial chain, and optional only provides an additional layer of accident protection.

2. The "lim" field used to define the minting limit is removed, because BRC-21 assets are subject to strict minting and redemption rules , so there is no need to limit how many tokens can be minted in a single transaction.

3. Add a new field "src" to specify the starting chain, which can be a string of letters (such as Ethereum) or a number (but An additional list is required).

4. Add a new field "id" to specify the target token on the initial chain, and you can fill in the contract address of the token.

BRC-20 asset deployment format

BRC-21 asset deployment format

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As for the use cases, Interlay Labs' view is that although the BRC-21 standard can theoretically introduce various other chain assets such as ETH, DOT, SOL, etc. into Bitcoin network, but the real use of the standard is actually in the introduction of decentralized stablecoins, and deploying them on top of the Lightning Network or other payment protocols.

Interlay Labs further explained that decentralized stablecoins like DAI and RAI often require complex minting, redemption and liquidation mechanisms to maintain their effective anchoring . Due to the natural lack of programmability of the Bitcoin network, protocols such as MakerDAO cannot directly deploy stable coins such as DAI on the Bitcoin network. This situation is still unlikely to change in the future.

Interlay Labs believes that through the BRC-21 standard, these assets will be bridged to the Bitcoin network in a fully decentralized form, thereby making full use of the Bitcoin network's Compared with spending a lot of time on building a programming protocol for Bitcoin, this kind of method that only needs a few lines of code to take effect may have a better chance of achieving mass adoption.

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