On May 7, Jack Levin launched a BRC-20 token on the Bitcoin network. The token called VMPX had a fair launch, and similarly to XEN Crypto, it has no founder allocation, started from supply zero, and was entirely minted by the community. It entered strongly into the new booming market, breaking records for the number of holders and the volume traded. It now stands in second place on the BRC-20s listing, and the first Google backend architect is thinking about giving it some utility on the upcoming X1 chain other than scaling Bitcoin itself.
What is a BRC-20 token
BRC-20 is a fungible token standard made in March by a Twitter user called Domodata, who created it explicitly for the Bitcoin blockchain with the help of the Ordinals protocol. BRC-20 uses JSON data to deploy tokens, mint tokens, and transfer tokens. Similarly to inscriptions, BRC-20s can be attributed to satoshis or sats and then traded or swapped with others. The advent of BRC-20 is a historic moment for Bitcoin, as it’s the first time that the network is becoming a host for tokens, even if they still remain satoshis. This was made possible thanks to the taproot upgrade and the Ordinals theory ideated by Casey Rodarmor.
It is yet unknown what kind of utility these tokens will have, but meme coins are one of the most popular and fastest-growing out there.
BRC-20 tokens are different from the Ethereum ERC-20 standard because they’re not smart contracts in the first place. ERC-20 smart contracts often have complex logic and sometimes even admin keys, giving the owner the possibility to change the contract; this is why investors look for security audits when buying tokens. No security audit is required for launching BRC-20s because of their simplicity and immutable rules. They have no intrinsic utility, and little can be done with them as of now; however, the booming market, which has already exceeded 1 billion dollars, may bring some creativity and use cases to the field. Even Michael Saylor, the second-biggest Bitcoin whale after Satoshi Nakamoto, is excited about the possibilities they bring to the market.
first the laser-eyes laugh at you— Udi Wertheimer (@udiWertheimer) May 9, 2023
then they fight you
then their hero does a 180 and joins you
then they go the therapy pic.twitter.com/eSsPYKBff7
BRC-20 tokens are relatively new and have a smaller market cap than ERC-20 tokens. Most of them are meme coins, such as ORDI and PEPE. If no utility is found for them, they may end up losing all value over time, as has happened with many tokens on Ethereum. Token like VMPX will have utility on X1.
What is VMPX BRC-20
VMPX was launched by Jack Levin as part of his adoption and XEN community-building strategy. Similarly to XEN, VMPX was launched fairly, with first principles in mind. It has no allocation for founders or venture capitalists, and the community created the entire 108,624,000 supply from scratch. The mint was very swift, and within 6 hours, the market cap reached 50 million dollars or so, which is a record. VMPX also broke the record for the number of holders and the volume at launch.
The deployment of VMPX was significant because it had a great impact on the Bitcoin chain. The mempool filled with 465k transactions causing congestion. It was caused by the VMPX minters and it couldn’t go unnoticed in the Bitcoin community. Transaction fees rose to sustained levels probably never seen before, leading to the creation of the biggest block in history that paid more in fees from multiple users than the block reward itself. Transaction fees reached 600 sats/vByte.
Binance had to halt Bitcoin withdrawals from its trading platform twice within 12 hours.
XEN launched on 10 different chains, and including Bitcoin in the XEN ecosystem is part of the plan. VMPX is a testing ground for larger endeavors like X1. Mr. Levin plans on creating X1 as a bridge between Bitcoin and the Ethereum Virtual Machine-run world. In his statements, he also talks about creating rollups for Bitcoin, which would effectively work as an L2 scaling solution for Satoshi Nakamoto’s chain. It’s yet unclear what further role VMPX will play in the whole ecosystem, but Mr. Levin talked about giving it utility and plug it into the Ethereum ecosystem.
“Currently Bitcoin is used as a settlement layer only and for exchange of value. What needs to be created is a rollup system, preferably decentralized, that allows for execution and settlement solution on Bitcoin blockchain. So we’re working on the rollup solution that will be able to utilize the deployed ordinal BRC-20 tokens within the rollup system so you can be presented with DeFi layer” said Mr. Levin in an interview with Crypto Banter.
With the BRC-20 craze starting to take off and access to the most liquid asset, it’s very likely that VMPX will experience bigger highs. Many of these BRC-20s will fail, but VMPX is the fairest of all the BRC-20s out there because of the way the launch was conducted and the number of holders involved. It has the whole XEN community behind it.
VMPX was listed on Gate.io, BitKan, and Bkek the next day, and Binance announced support for BRC-20s, which will surely have an enormous impact on the space and increase demand for these tokens.
Coinmarketcap and CoinGecko also listed VMPX, showing a volume of 30 million dollars. There are many other BRC-20s out there, with ORDI being the biggest when it comes to market cap, but Mr. Levin sees it as a pre-mine. A pre-mine could be considered a launch that wasn’t promoted to a larger audience, giving the founders the possibility to mint a large part of the total supply while spending as little on transaction fees as possible.
“High fees have nothing to do with keeping project hidden while preminting; it’s about unfair priority,” he says, then adds: “People will continue to be the drivers of fairness (or unfairness), not protocols.
How to buy VMPX
The mint of VMPX ended and the token can now be bought on exchanges like Gate.io, BitKan, and Bkek.
VMPX can be bought trustlessly using your own keys, having full ownership of the token, and Unisat.io is the best place to buy VMPX because they have a dedicated BRC-20 marketplace integrated with their wallet. The users trade tokens using Partially Signed Bitcoin Transactions (PSBTs) which is a Bitcoin standard facilitating portability of unsigned transactions, which allows multiple parties to sign the same transaction. This is different from how exchange happens on Ethereum where the smart contract acts as a trustless mediator in the transaction between parties.
To buy VMPX on this marketplace, you need to download the wallet from unisat.io and create a taproot address which needs to be then loaded with BTC.
Once you have BTC, you can go to the marketplace and search for VMPX in the search field. You’ll be presented with different offers, each of which gives us the number of sats/VMPX and the price in dollars. Finding an offer to pay for with the least sats/VMPX is the goal of every buyer.
The big number is the total amount of VMPX tokens in that one UTXO. It gives the owner the possibility to split this total amount BRC-20s, each of which is worth the current price per unit.
When buying VMPX, it’s better to use a fee higher than the current one when the network is congested. This way, the transaction goes to the top of the queue, ensuring its inclusion in the next block.
BRC-20 tokens have gained popularity in the Web3 space as a way to create memecoins on Bitcoin. However, they have also caused some controversy and criticism among some Bitcoiners, who see them as shitcoins that increase transaction fees and clutter the network. Bitcoin maximalists consider these tokens a spam attack on the network, and some voices are calling for solutions.
On the other side, BRC-20 users, see high transaction fees as a result of growing demand and Bitcoin adoption.
The number of people who have traded on Ordinals/BRC-20 just keeps accelerating! pic.twitter.com/nVzVWDy3ut— Leonidas (@LeonidasNFT) May 10, 2023
In fact, the data shows that more and more users are coming to mint and trade these tokens.
Bitcoin is working as intended, continuing to produce blocks every 10 minutes and raising the fees as demand and network usage grow.
The concern stems from those who say that transactions involving small amounts of bitcoin will be outpriced, making transacting on-chain very expensive. Opening, closing, and rebalancing lighting network channels have also become more expensive, leading users to flock to bigger hubs. This effect will effectively outprice people transacting in poor countries like San Salvador or Argentina.
Other scaling solutions haven’t gained popularity, and proponents of bigger blocks are back on it again.
The miners are the real winners here, taking the rewards and fees they have never seen before.
It will be interesting to see how the situation develops, but it’s clear how X1 can become Bitcoin’s scaling solution. Mr. Levin is working on a Bitcoin atomic bridge and XSATs which will be stable coins launched on X1. The details are still unknown, but the distribution of XN tokens, which will be gas tokens on X1, has already started.
Every XEN burn gives users a portion of the whole 1 billion XN supply. XEN was launched based on a fair launch with first principles in mind, and XN will be built upon this strong foundation and a community of over a million users.