BRC-20 is an experimental token standard by Domo. Tokens can be deployed, minted, and transferred using Ordinal, a system for numbering the smallest unit of Bitcoin, satoshis (sats).

MAP Protocol released the BRC-201 cross-chain standards for BRC-20 tokens to exchange with tokens on Turing-complete chains, i.e., chains that support smart contracts such as Ethereum, BNB Chain, and MAP Relay Chain.

The limitations of BRC-20 tokens

Although BRC-20 paved the way for a new way to use the Bitcoin network, it was a very early project and had a lot of downsides. Limited interoperability and utility are the two major drawbacks that prevent the development of BRCV-20 tokens.

Limited interoperability

The BRC-20 token standard was specifically tailored to function within the Bitcoin blockchain ecosystem. This aspect leads to interoperability challenges, particularly for users who wish to utilize alternative blockchain systems. This limitation arises due to the absence of the feature on the BTC network.

Interoperability between chains is important because it facilitates seamless token transfers within the crypto ecosystem across disparate blockchain networks. This allows users to use cheaper, more efficient networks when this is convenient.

Limited utility

Primarily designed for the tokenization of fungible assets, the BRC-20 standard is unsuitable for the tokenization of nonfungible assets or the implementation of complex token features such as tokenized ownership rights or conditional transfers

As such, projects that necessitate more specialized tokenization functionalities that go beyond the BRC-20 standard’s capabilities are likely to seek more feature-rich token standards.

What is BRC-201?

Essentially, BRC-201 is a cross-chain extension protocol to BRC-20 tokens. It has an enhanced indexer that supports BRC-201 to parse additional extension operations.

This cross-chain standard is compatible with BRC-20, which means it can be used for bridging BRC-20 tokens to smart contract-supporting chains like Ethereum, BNB Chain, NEAR, etc., thereby enabling the integration of BRC-20 assets into DeFi and other financial scenarios and applications.

More use cases with BRC-201

Additionally, BRC-201 can also be used by exchanges and other institutions for depositing and withdrawing BRC-20 assets. With cross-chain functionality enabled, BRC-20 assets can be added to the wider DeFi space and other financial scenarios. In the future, BRC-201 will also add support for NFTs in the Bitcoin ecosystem to encourage more innovative use cases and drive the growth of the Bitcoin community.

For technical details of BRC-201, please view our documentation on BRC-201.