Magic Eden Dives Deeper Into Bitcoin With BRC-20 Tokens

Multi-chain NFT marketplace Magic Eden on Tuesday announced support for BRC-20 tokens, expanding its Ordinals offerings to include the class of tokens built on top of Bitcoin. BRC-20 support will be added at 8pm ET on Tuesday, a spokesperson told Decrypt.

In addition to letting users trade BRC-20 tokens on the secondary market, the move lets people create their own new tokens on Bitcoin and let traders mint them directly through its launchpad. Magic Eden’s launchpad is offered as a premium service for creators with marketing and strategy support.

Magic Eden established itself as a leading venue for Bitcoin-based collectibles not long after its Ordinals marketplace debuted in March, moving early to support the NFT-like Ordinals amid growing hype and leveraging its established name in a nascent space. 

The inclusion of BRC-20 tokens represents a push deeper into the emerging frontier for assets built on Bitcoin, as Magic Eden—originally a marketplace for NFTs on Solana—aims to hold onto its newfound lead by effectively becoming a crypto token exchange on top of an NFT marketplace.

“This is yet another step at the beginning of our journey to build the best NFT platform for the Bitcoin ecosystem,” said Magic Eden co-founder and COO Zhuoxun Yin, in a release.

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In terms of transaction volume for Ordinal inscriptions, Magic Eden and crypto exchange OKX are currently duking it out for the top spot, posting comparable flows over the past week according to public blockchain data collected via a Dune dashboard.

Magic Eden's Bitcoin GM Chris Akhavan told Decrypt that the marketplace will charge a small transaction fee on BRC-20 trades. For newly-inscribed BRC-20 tokens offered through the launchpad, Magic Eden will donate half of the associated fees to the Ordinals protocol team.

“We believe it’s important to support builders in the space and the Ordinals team makes all of this possible,” he said. “We have a strong conviction that building on Bitcoin is here to stay.”

Akhavan noted that Magic Eden's Ordinals launchpad has been used by over 40 different creators, adding that he believes that its “smooth user experience and massive reach” has made it “a favorite amongst creators.”

Launched earlier this year by developer Casey Rodarmor, Ordinals is a protocol that allows for the creation of NFT-like assets on Bitcoin by “inscribing” data to individual satoshi, the smallest unit of currency that a Bitcoin can be divided into.

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This data can include images, which Bitcoin users gravitated toward early on. Yet, after BRC-20 tokens were pioneered by the pseudonymous on-chain data enthusiast Domo, who took inspiration from ERC-20 tokens on Ethereum, text-based inscriptions—used to create, trade, and mint BRC-20 tokens—took off.

Showcasing the shift, around 85,000 text-based inscriptions were made on Monday compared to around 3,600 images committed to individual satoshi, according to a Dune dashboard.

The fervor for BRC-20 tokens has weighed significantly on the Bitcoin network at times. Bitcoin transaction fees skyrocketed last month amid a flurry of text-based inscriptions, drawing criticism from some Bitcoiners.

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The total fees paid for Ordinal inscriptions topped 272 BTC, around $7.6 million on Tuesday, according to a Dune Analytics dashboard. On Monday alone, over 372,000 inscriptions were created on the Bitcoin network—contributing to a daily record 682,281 Bitcoin transactions—with daily network fees hitting 23 BTC, or around $656,000. I can't believe my eyes BRC-20 demand leading to a 700% increase in fees AFTER what we've seen with Ordinal Inscriptions 12,800% increase in fees from BEFORE Ordinal...

The market capitalization of BRC-20 tokens has grown to $261 million since they were introduced, comprised mostly of ORDI, the initial BRC-20 created by Domo and valued at $155 million, according to CoinGecko.

At its peak, ORDI traded hands at $28.51, but the coin has since sunk to $7.44, as of this writing. Over the past 24 hours, ORDI has seen nearly $20 million worth of trading volume.

While Magic Eden is the latest player in the crypto space to announce support for BRC-20 tokens, it’s not the first. ORDI was listed on several crypto exchanges, such as Crypto.com and Gate.io last month.

However, Yin of Magic Eden believes the marketplace’s move will make its platform distinct, catering to JPEG enjoyers and a menagerie of meme coins built on Bitcoin at the same time. 

“Since Bitcoin Ordinals and BRC-20 began gaining traction earlier this year, we noticed that the user experience was lacking as the two technologies are broken up and lack fluidity,” Yin said. “With the introduction of BRC-20 on our platform, we hope to seamlessly merge the two.”