Blockchain developer to fork BRC-20 to bring defi to Bitcoin

A blockchain developer is preparing to fork the BRC-20 token standard to introduce decentralized finance capabilities to the Bitcoin network.

A blockchain developer with the pseudonym Mikael.btc, known as the creator of the BRC-100 token standard, wants to fork BRC-20 in order to implement a new protocol designed to bring decentralized finance to the Bitcoin (BTC) network.

The developer outlined its plans for the fork in a post published on X on August 9, emphasizing that the upgrade will address key limitations of the BRC-20 standard, such as “lack of programmability,” scalability challenges, and lack of defi infrastructure.

According to Mikael.btc, the new protocol will leverage technologies such as Inscriptions, which are used to add metadata to Bitcoin’s sats, and OP_RETURN, a script that allows data to be stored within transactions, thus extending Bitcoin’s functionality and giving users access to decentralized finance.

“Each BRC-20 token will be paired with a BRC-100 token of the same ticker and the same supply. 100% of the new BRC-100 token will be distributed to holders of the original BRC-20 token in exactly the same amount as the assets in BRC-20.”

Mikael.btc

The developer added that after the fork, BRC-20 token holders will automatically receive equivalent assets on the BRC-100 protocol. However, those who hold BRC-20 tokens held on centralized exchanges will have to wait for the exchanges to distribute the newly forked assets.

The push for Defi on the Bitcoin network has gained momentum recently after a research report from crypto venture capital firm Pantera Capital predicted that the Bitcoin-based Defi ecosystem could attract hundreds of billions of dollars in liquidity via web3 protocols. This means that Bitcoin’s Defi sector could reach a market share similar to Ethereum’s.