Introduction

Source: CyBord Website

Bitcoin users and members of the crypto space have experienced an onslaught of inscription standards and tokens from the BRC-20, ARC-20, ASC-20, and other inscriptions that allow users to inscribe arbitrary data on native tokens.

The BRC-20 inscription standard was initially launched to introduce additional use cases to the Bitcoin blockchain by taking advantage of the taproot upgrade, which introduced Ordinals. However, there was still room to improve the cost effect and complexity of launching inscription tokens, so the CBRC-20 inscription token was created as an upgraded form of the BRC-20 standard.

What is the CBRC-20 Protocol?

The CBRC-20 standard is an inscription standard built based on the BRC-20 standard with an added feature: the Metaprotocol and metadata fields added by the Ord 0.10 upgrade. The CBRC-20 standard uses the new meta and metaprotocol fields of the newly introduced ord 0.10 to improve the cost and complexities associated with participating in the inscription space.

The standard’s design kept the functional logic and use cases of the BRC-20. Yet, it used the metadata field and the Metaprotocol to reduce the size of inscriptions and the cost while attempting to simplify the indexing process for inscription tokens in Bitcoin’s ecosystem.

BRC-20 and Ordinals - The Foundations of the CBRC-20 Protocol

BRC-20 tokens started as an experimental standard on Bitcoin modeled to replicate the features of ERC-20 tokens on Ethereum.

BRC-20 leverages the Ordinals protocol as its primary data availability layer, utilizing off-chain indexers to establish the meta-protocol state.

The BRC-20 standard is a new protocol for creating and managing fungible tokens in Bitcoin’s ecosystem by inscribing data like pictures and lyrics on satoshis. The introduction of BRC-20 inscription tokens allowed the creation of other use cases like NFTs, Defi projects, and smart contract-like dApps while leveraging the security of Bitcoin’s blockchain.

Understanding Ord 0.10 and Ord 0.9

The Ord 0.9 version introduced improvements to inscription efficiency by folding or merging information in the BlockIndex with the Ordinal database. This ensured that relevant information related to inscriptions was readily available, eliminating the need to constantly look into the BlockIndex and improving the processing speed for Ordinal operations.

The Ord 0.10 upgrade built on this by introducing Batch inscriptions and the Metaprotocol field. This created a dedicated section outside the inscription data for storing metadata, which improved the readability of meta-information, especially in inscriptions with large data.

The BRC-20 token standard was built with the Ord v0.9 protocol and modeled after the ERC-20 token standard.

History of CBRC-20

The history of CBRC-20 tokens started with the Taproot upgrade that allowed Casey Rodarmor to launch the Ordinals project in January 2023. This allowed developers to inscribe content on Satoshis, and with each inscribed satoshi came standards like BRC-20 tokens.

The inscription standards allowed users to utilize a loophole in the Taproot upgrade, enabling them to reduce the size of each transaction, leading to fewer fees and faster execution. But certain purist Bitcoiners started supporting projects that filter out Ordinal and inscription transactions, which Ordinal users saw as censorship, so the CBRC-20 token standard presented a compromise.

The protocol was proposed by Cy[bord] to use less block space instead of taking up more resources in the blockchain. This allowed CBRC-20 tokens to have the same mint, deploy, and transfer functions at a fraction of the size, cost, and complexity since there aren’t any JSON files inscribed on Bitcoin for creating CBRC-20inscriptions.

Other indexers of the BRC-20 protocol decided to “freeze” on ord v0.9 for BRC-20 indexing, which means that BRC-20 protocols wouldn’t be able to leverage the new “Metaprotocol” or “metadata” fields introduced with the recent Ord version.

How Does it Work? Taproot Protocol and Metaprotocol

The Ordinal Envelope

The Ordinal envelope is the code structure that allows developers to inscribe data to satoshis using the Ordinal protocol.

The envelope comprises three major components: the header, identifier, and content specification. The header is the flag element that differentiates the ordinal inscription from the other data on the blockchain. It is a foundational, non-operational structure that contains conditional executions like OP_FALSE, OP_IF, and OP_ENDIF.

The identifier pushes the “ord” identity for the blockchain to understand how the data is processed, and the content specification contains the inscribed content. It shows the data type, the MIMe type, and the actual data being inscribed, whether it is text, image, or video content.

A well-executed Ordinal envelope ensures proper identification and interpretation of embedded data, standardizes token creation, and enables seamless interactions with Ordinal inscriptions on the blockchain.

Metaprotocol

The BRC-20 and CBRC-20 standards are inscription standards that allow developers to create tokens on Bitcoin. The difference between the two standards is the newly added Metaprotocol and the metadata field.

The Metaprotocol is an added field in the CBRC-20 token design that stores information on how these tokens should behave and interact with projects in the Ordinal framework. The metadata field contains specific information previously stored in the inscription’s JSON file, such as the protocol identifier, the operational function, and the guidelines agreed upon by the community to achieve desired standards and functions.

The Cybord project describes the Metaprotocol as an interactable protocol formalized through off-chain indexing of on-chain information. This highlights the protocol’s capacity to act like a librarian, meticulously indexing the details of numerous CBRC-20 tokens, which are online, in an interactive offline library that users can query, filter, and search for productive results.

The Metaprotocol is the feature that allows CBRC-20 tokens to be faster and smaller because, unlike the BRC-20 tokens that use the JSON format to store data, CBRC-20 uses the CBOR format that is smaller in byte size than its JSON equivalent.

The main reason is the CBOR code design that eliminates the use of brackets, colons, commas, and other special characters while storing the same information the same way. This reduces the data size of the inscription, leading to lower costs and faster indexing.

Features of the CBRC-20 Ecosystem: Xmail and The Crafter

Xmail

Source: CyBord Website

The Xmail feature is a virtual transfer function that allows users to transfer CBRC-20 tokens between accounts, leveraging the virtualization of metaprotocol states. As the name suggests, the Xmail project enables users to mail CBRC-20 tokens to each other without transferring an inscription or UTXO to the receiver.

The virtual operations of Xmail are defined by the metadata in the Metaprotocol field that specifies the details of the transaction, such as the format, the purpose of initiating the mail, the target, the sender’s address, and the amount of CBRC-20 tokens to mail.

Xmail allows users to send tokens without triggering an on-chain Bitcoin transaction on the condition that the tokens are not locked in an existing transfer transaction.

The Crafter

Source: CyBord Website

The Crafter is an easy means of creating CBRC-20 tokens in the browser without advanced setups and little technical knowledge. The crafter needs the user to designate their Taproot address as the designation for the tokens, the Meta attribute such as the tick and amount of tokens, the MIME content type, some Satoshis for inscribing, and the funding address.

Aside from minting, the platform allows users to deploy, Xmail, and transfer tokens without incurring fees. This allows users to experiment and experience the joys of interacting with innovative technologies.

Use Cases for CBRC-20 Tokens

The CBRC-20 token is new, meaning few projects display the applicable value of the CBRC-20 standard. Yet, the potential value of the CBRC-20 protocol that emulates the BRC-20 protocol is overwhelming.

Ordinal Novus

Source: Ordinal Novus Website

Ordinal Novus is a platform that allows users, creators, and Bitcoin enthusiasts to create, collect, and partake in Bitcoin-based ordinals, inscriptions, and NFTs.

The Ordinal Novus is the first marketplace for CBRC-20 tokens, which utilizes the API of the Cyborg_BTC project. The platform has listed BORD, the first CBRC-20 token created by Cybord.

Decentralized Finance

Decentralized financing efforts were previously focused on smart contract blockchains like Ethereum. The introduction of CBRC-20 tokens is making significant strides in introducing DeFi to the blockchain.

The CBRC-20 protocol is capable of helping to create financing pools for projects on Bitcoin. CBRC-20 tokens can be customized to tokenize real-world assets using the CBOR format.

This improved flexibility makes them suitable for decentralized exchanges, lending protocols, and yield farming systems on Bitcoin, with future developments for enthusiasts.

Peer-to-Peer Transfers

The Xmail feature is fundamentally designed for transferring tokens across different accounts. Although the CBRC-20 tokens are new, there is a future hope to be capable of spending the tokens similar to how Bitcoin is used on the lightning network.

In the future, CBRC-20 tokens might lead to the creation of decentralized applications (dApps) for making payments on commercial platforms with flexible payment solutions.

The Growth of the CBRC-20 Token Standard

CBRC-20 tokens utilize the Ordinals and taproot infrastructure, inheriting the security, decentralization, immutability, and hype.

While some members of the Bitcoin ecosystem believe inscription protocols like CBRC-20 are spamming the Bitcoin network with arbitrary data and are making the whole network look bad, other members of the Bitcoin community believe the development of CBRC-20’s would fill the gap caused by Bitcoin’s lack of flexibility in token creation.

CBRC-20 tokens allow developers to offer DeFi, collectibles, and storage features to users, bringing the advantages of NFTs to the Bitcoin ecosystem.

As a decentralized project built on a decentralized infrastructure that boasts high security and privacy while being flexible, the CBRC-20 protocol is well placed to develop due to community interest and involvement.

Conclusion

The CBRC-20 token standard is an upgraded protocol that addresses the limitations of the BRC-20 standard to increase the efficiency of indexing while reducing cost and size through the utilization of the metadata field and CBOR.

The project is built on the Ordinal protocol and the Metaprotocol, taking advantage of the latest Ord v0.10 upgrade that introduced the metadata field. The CBRC-20 ecosystem contains features like the Xmail and the Crafter for a simplified, user-friendly experience. These underlying infrastructures and features allow the application of the CBRC-20 standard in several projects like NFT marketplaces, DeFi projects, P2P transfers, and others.

The future development of the CBRC-20 protocol depends on the community’s involvement and ability to demonstrate value within the Bitcoin ecosystem.

References

https://cybord.org/
https://bitcointalk.org/index.php?topic=5478072.0
https://www.altcoinbuzz.io/bitcoin-and-crypto-guide/cbrc-20-transforming-token-efficiency-on-bitcoin/
https://www.theblockbeats.info/news/49094
https://www.blocktempo.com/introducing-a-new-protocol-for-bitcoin-asset-issuance/
https://thebitcoinmanual.com/articles/cbrc-20-tokens/
@ordinalfriends/how-to-buy-cbrc-20-tokens-3684eac095c4"">https://medium.com/@ordinalfriends/how-to-buy-cbrc-20-tokens-3684eac095c4