ARC-20 is an experimental token standard for fungible tokens (colored coins) on the Bitcoin network. It is inspired by the BRC-20 token standard and constructed using the Atomicals protocol. Keep reading to learn more about ARC-20 tokens, how they work, and how you can mint them.
ARC-20 tokens represent digital ownership using satoshis. These tokens can be transferred, divided, and combined similarly to regular Bitcoin units. They feature a built-in ticker and name service, ensuring that every token's ticker, symbol, and name are unique. Once an ARC-20 ticker is minted and registered, it is permanent and cannot be reused.
Each ARC-20 token is intrinsically tied to the value of at least one satoshi, ensuring that its value cannot drop below this minimum. However, this does not guarantee market demand, so it is crucial to conduct thorough research (DYOR) before investing.
ARC-20 assets maintain a complete transaction history from their creation. This enhances transparency and decentralization, addressing common security concerns associated with digital asset ownership.
ARC-20 tokens can be minted via two key methods: decentralized minting or direct minting.
1. Decentralized minting. Decentralized minting allows creators to specify various parameters, such as the total number of mints allowed, the rewards per mint, and the specific conditions under which minting can occur. This method distributes the minting process, enabling anyone to mint tokens over time based on the predefined parameters set by the creator.
2. Direct Minting. Direct minting involves the creation of a single transaction output that contains the entire token supply. This method gives creators full control over the distribution and supply of the tokens, requiring an upfront commitment of satoshis equivalent to the intended token supply. Creators have to demonstrate commitment to the project, reducing the risk of fraudulent activities or rug pulls.
Learn more: What Are ARC-20 Tokens?