Can the new BRC-20s kickstart the "DeFi summer" on Bitcoin?

BRC-20S (BRC-20 Staking) is an extended version of the BRC-20 protocol proposed by OKX. Its aim is to introduce a staking mechanism for BRC-20 Tokens or Bitcoin on the Bitcoin network.

Through BRC-20S, users can pledge their BRC-20 Tokens or Bitcoin and receive corresponding BRC-20S Tokens as rewards. Like BRC-20, the calculation of staking rewards will also be implemented through an index. OKX will provide an open-source interface for profit calculation, and the staking rewards of any user will be consistently calculated in the backend and open-source tools, ensuring the uniformity of all calculations.

BRC-20S Interactive Process

Currently, the deployment of BRC-20S still awaits the indexing by OKX and the completion of related infrastructure such as the BRC-20S token trading market. However, we can imagine what new changes BRC-20S may bring to the market.

New BRC Token Issuance Method

Currently, the issuance of BRC-20 Tokens has gradually evolved from the original announcement of the Ticker (Token name) for everyone to carve on their own, to being completed through the mature BRC-20 Token issuance tool, Luminex. The principle of completion through Luminex is that when the project party deploys BRC-20 Tokens, the number of single engraved Tokens is set to be the same as the total amount. First, all Tokens are engraved in their own hands, and then users pay Gas through Luminex to finally complete the distribution of Tokens. With Luminex, the whitelist system has been well applied to the issuance of BRC-20 Tokens, providing assistance for the project's cold start.

And BRC-20S supports the direct pledge of Bitcoin to "mine" BRC-20S Token income, which may once again trigger a new change in the BRC Token issuance model. In the future, new projects may directly distribute initial Tokens by pledging Bitcoin, and the "Bitcoin pledge mining" trend may be set off. At the same time, BRC-20S also supports the pledge of BRC-20 Token to "mine" BRC-20S Token income, which will expand the gameplay of BRC-20 Token. Will BRC-20 Token leader like $ORDI become a "golden shovel"?

In the Ethereum ecosystem, the "Dual Token Model" is already common. The BRC-20S has cleared the obstacles for implementing the "Dual Token Model" on the Bitcoin network, but the next question is, how can we play with it?

I have envisioned a scenario for this using a "Dual Token Model". The recent new concept of "Recursive Inscriptions" is essentially a reference between inscription resources on the Bitcoin chain. If a studio that generates art appears and uses an AI model to train a generated art piece using all existing inscriptions on the chain as material and auction it off, then the BRC-20 Token can serve as the "parent token" to exert governance effects, such as deciding the theme of each art piece generated (whether to retain or remove which inscriptions as training materials, etc.), deciding which art pieces to put on the shelves each period, and external collaboration decisions of the studio, etc. At the same time, the income from pledging this "parent token" can be used as a payment token to claim this art piece and exert its utility.

There are many scenarios for the "Dual Token Model", such as GameFi, SocialFi, and more. Combined with "Recursive Inscriptions", there will surely be more interesting applications appearing on the Bitcoin network.

Outlook: Staking for Small Images

Since there is already a BRC-20S that implements staking for BRC-20 tokens, is it possible to directly stake small images?

For example, two keywords can be added to the agreement, one specifying the name of the NFT series and the other specifying the collection of valid inscription numbers for the series (such as Inscription #10000, Inscription #10001, etc.). By confirming the validity of the deposited inscription through off-chain indexing, the holding address of the valid deposited inscription can be used to calculate the staking reward, thus achieving staking for small images.

Conclusion

BRC-20S supports the staking function on the Bitcoin network, expanding the imagination space of BRC-20 Tokens, and is expected to have a better positive impact on the liquidity of Bitcoin and BRC-20 Tokens. The constantly developing Ordinals ecosystem is hard not to love.

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