Join the Bitcoin Ecosystem Craze with This Guide

Author: Delphi Digital

Compiled by: Followin

Crypto research firm Delphi Digital recently released a Bitcoin ecosystem research report titledBitcoin Ordinals and Runes Mania". The report believes that the Bitcoin ecosystem is booming, driven by the emergence of Ordinals. Now is the most exciting time to explore Bitcoin. More and more users are actively participating in the Bitcoin ecosystem. Ordinals kicked off and stimulated development activities on a largely dormant chain. This feels a lot like the explosive growth that Ethereum experienced between 2020 and 2021. The report also lists some projects worth paying attention to next.

The following content was compiled by Followin:

introduce

The Bitcoin ecosystem is ushering in its glorious moment.

Once considered a boring asset in the crypto space, it is now experiencing a resurgence. Bitcoin’s resurgence is driven by multiple factors, including the recent Bitcoin ETF, the expected halving in April, and the possibility of reaching new all-time highs, all of which have attracted widespread media attention.

Looking back, the launch of Ordinals in December 2022 greatly inspired Bitcoin developersCommunitydynamism and has brought many downstream impacts.

The popularity of Ordinals has driven the growing demand for block space on the Bitcoin network, and the resulting high transaction fees have promoted the growth of Bitcoin layer 2 solutions and DeFi projects. These areas have become the focus of this year.cryptocurrencyfocus of discussion in the field.

Bitcoin, the Trillion-Dollar Casino

Although institutions andcryptocurrencyNatives continue to accumulate Bitcoin as a store of value and “digital gold,” but there’s more brewing behind the scenes.

Bitcoin may become the world's largest on-chain "casino".

From its early days as Satoshi Dice (the first gambling application on the Bitcoin network), Bitcoin has evolved into newer and more interesting forms of speculation in recent months. These include BRC-20 meme coins, Ordinals, Runes (coming soon), and newTokenrelease.

The argument for the growing speculation on the Bitcoin network is simple:

• Bitcoin is a multi-trillion dollar asset with the strongest monetary position among cryptocurrencies. However, until recently, much of Bitcoin’s capitalization remained passive due to limited use cases.

• A subset of users will seek to use their capital for entertainment, speculation, and yield generation while wanting to stay within the Bitcoin ecosystem, viewing Bitcoin as hard money, unlike other cryptocurrencies.

• Even a small but still expanding portion of that capitalization would represent a significant amount of money. Despite Bitcoin’s market cap being three times that of Ethereum, Bitcoin is L2 The value locked in ETH and BRC-20 (~$6 billion in total) is still only a fraction of Ethereum’s TVL (~$93 billion locked in stablecoins, DeFi, NFTs, etc.). This suggests huge growth potential.

• Retail investors who are already familiar with Bitcoin are increasingly participating in speculation. Videos circulating on platforms such as X show how Chinese aunts participate in speculation.

The confluence of these factors will lead to growing interest and capital inflows into Ordinals, Layer 2 solutions, and other Bitcoin network applications.

Bitcoin is positioned as an attractive hub for speculative activity

We have recently published several reports covering various aspects of Bitcoin:

• The Current State of Bitcoin

• Bitcoin Games

• The Great Cultural Opportunity Brought by Bitcoin Ordinals

In this follow-up report, we delve deeper into recent developments in Ordinals and Runes and highlight specific projects of note.

The Current State of Bitcoin

In terms of NFT transaction volume, Bitcoin Ordinals holds a solid second place in the NFT ecosystem with a transaction volume share of 24%. This is slightly higher than Solana, which ranks second with a transaction volume share of 22% over the past month.Xiaobai Navigationthird.

Inscriptions continue to grow in popularity. Since our last report, the total number of inscriptions has tripled to over 60 million and shows no signs of slowing down, driven primarily by the BRC-20 Tokenand support for Ordinalswallet（例如 UniSat）的日益普及推动的，UniSat 允许散户购买 Ordinals 和 BRC-20 代币上链。 虽然 Ordinals 在 2023 年 9 月至 10 月期间稍作休息，但随着新代币标准的出现，活动在 11 月有所回升。

Interestingly, the inscription craze that started with Bitcoin has spread to other chains such as Polygon, Avalanche, Fantom, and Solana, which now have their own inscription protocols.

While BRC-20 still accounts for a large portion of Bitcoin transactions, non-BRC-20 Ordinals are also performing well and have a larger market share than for most of last year. Note, however, that this includes newer experimental token standards such as BRC-420, ARC-20, and bitRC-20. It is too early to tell which token standards will become popular over time.

Since its launch in June 2023, recursive inscriptions have been slowly gaining momentum as builders begin to learn and appreciate the benefits of recursive inscriptions, primarily their ability to extend the 4MB data cap constraint per inscription ordinals and allow for greater interoperability and design space around Ordinals. As of February, there are over 375K recursive inscriptions on the Bitcoin network, and momentum shows no signs of slowing down.

The importance of Ordinals to Bitcoin is often underestimated because it introduces a new fee stream for miners. Due to the correlation between file size and fees, the cost of including data in a Bitcoin block can be high. Over the past 15 months, the total fees paid to miners through recording Ordinals have exceeded 6,175 BTC ($308.75 million).

During the peak of Ordinals inscription activity in November-December last year, monthly fees paid to miners soared from 26.4 BTC in October 2023 to a staggering 2,095.8 BTC in December 2023, a remarkable 79-fold increase in fee revenue in two months. While enthusiasm may have faded, Ordinals fees continued to climb steadily in February, albeit at a more moderate rate. If this trend continues, it could help ease Bitcoin’sSafetyThe problem of declining budgets.

Source: Electric Capital’s 2023 Developer Report

While most Bitcoin developers are focused on the Bitcoin mainnet and Bitcoin layer 2 solutions, the Ordinals side has maintained consistent activity in 2023. Looking ahead to 2024 and beyond, we expect this momentum to continue and gradually expand. The Ordinals developer scene is passionate.

market

There is a clear oligopoly in the Ordinals market, with Magic Eden and OKX battling for market dominance for much of 2023. Magic Eden initially had an early advantage in the third quarter of last year, but faced strong competition from OKX starting in August. OKX eventually became the leader in the second wave of the inscription boom from November to December 2023, capturing 84% of Ordinals' trading volume market share during this period.

Currently, OKX continues to lead the market with a trading volume of 53.5%, followed by Magic Eden in second place with a trading volume of 31.1%. OKX has the most Ordinals users, with a cumulative number of 166,500. Magic Eden is close behind with 146.7K. As of the time of writing, Ordinals has reached a peak of 468.3K cumulative users.

We expect competition between these two markets to intensify in 2024.

Runes: Native Fungible Tokens on Bitcoin

Casey loves his Viking costume

Ordinals introduced a groundbreaking method for creating non-fungible tokens (NFTs) on Bitcoin. Now, a new protocol called Runes is emerging to facilitate the creation of fungible tokens on the Bitcoin network, providing an alternative to the BRC-20 standard. Unlike Originals, which were not designed for fungible tokens, Runes utilize the OP_RETURN field instead of witness data, simplifying the process and potentially reducing confusion.

Runes operate on a UTXO (Unspent Transaction Output) basis, and during a Bitcoin transaction, the Rune balance on an input UTXO is by default transferred to a new UTXO when the UTXO holding the Rune balance is destroyed. There are also "Runestones", which utilize data in the OP_RETURN field to contain instructions on how to transfer Runes in outputs, specific transfer addresses, and create new Runes.

BRC-20 creates a lot of unspent UTXO. In order to spend a rune, you have to destroy the UTXO, which is good for the system as a whole. It's also good for users, allowing for simpler PSBT-based swaps. Since UTXO can only be spent once, you can create a bunch of transactions, and then among those transactions, you can guarantee that only one of them can be mined. This can't be done with BRC-20 transactions.

Similar to BRC-20, runes can be openly minted and distributed fairly. But they can also be created by sending the entire supply to a single address. Runes will be carefully named with a maximum length of 28 characters. At launch, only rune names of 13+ characters will be available, and shorter names will be released gradually (reduced by 1 character every 4 months) to prevent wasting precious low-character names.

Runes use a commit-reveal naming scheme to prevent front-running (a common problem with BRC-20). They are also designed to work with SPV (Simple Payment Verification)walletCompatible, making lightweight Bitcoinwalletusers can use them.

Each Rune token will be uniquely identified, similar to the inscription numbers of Ordinals, and the initial ten runes (0-9) may be hard-coded into the protocol to ensure a fair launch without pre-mine. Runes will be available on mainnet block 840,000 (block halving, expected around April 20). Hundreds of different runes have been etched on the testnet.

Notable Rune Items

Runecoin(RSIC)

Runecoin emerged as an anonymous project, striving to be one of the first Runes ever created. Initially, 21,000 RSIC inscriptions were mysteriously airdropped for free to 9,211 wallets. Each RSIC is connected to 10 distribution centers, which in turn are connected to an earlier Inscription 126.

Each RSIC held in a wallet earns 21 Runecoin per block on the Bitcoin network. To increase RSIC rune earnings to 42 Runecoin per block, one can burn a perfect copy of Inscription 60750020 in a wallet holding RSIC, which costs about $300. Holding this boosted inscription upgrades all RSICs in the same address. Runecoin earned can be monitored on Ordiscan. The total supply of Runecoin is set at 21 billion, scheduled to be released when the Runes Protocol goes live.

In its gamification mechanics, Runecoin introduces a 24-rune symbol rarity system, ranging from 1 to 8192 symbols. Each symbol is assigned a hash value, and if the symbol matches the latest block hash via JavaScript, the symbol turns orange. In addition, there is a lottery, where each RSIC held earns one ticket per block, and will provide a large portion of the Runecoin supply to five lucky winners.

As of February 27, 2024:

• There are about 7,700 blocks left until the halving. Each RSIC purchased today (base price 0.09 BTC = $4,950) will earn 161,700 Runes by the halving - 323,400 Runes if it goes up.

• If Runecoin is issued with 1 billion FDV, it will be $0.048/Runecoin. In this case, each RSIC purchased today may earn $15,400

• Based on the current RSIC floor price, Runecoin’s implied market cap at launch is $160M (21,000 * 323,400 / 4,950 * 21B = $160M)

• We calculate the range of Runes in circulation at the time of the halving to be between 5.9B – 10.1B, depending on how much RSIC is boosted. For estimation purposes we can take the middle range = 8B

Runestones

Runestones is a program created by well-known Ordinals influencer Leonidas to reward individuals for participating in the first year of the Ordinals protocol. The move aims to fairly distribute Runestones based on participants’ on-chain activity and marks the one-year anniversary of the Ordinals launch.

Initially, Runestones will be distributed in the form of inscriptions, with the goal that each eligible wallet will receive only one Rune inscription, regardless of their level of participation. They all have the same artwork, and there is no rarity or difference between them. This means that Runestones will have a market price even before the Rune is launched.

When the Rune Protocol launches at block height 840,000, Runestone Rune holders will receive Runestone Runes based on the number of Runes they hold. Runestone Runes will serve as collectible souvenirs for Ordinals supporters in the first year, without any utility or roadmap. Runestone Runes will act as collectible meme tokens and speculative coins.

Runestone holds the title of the largest Bitcoin airdrop, and participation requires participants to hold at least three inscriptions at block height 826,600. With over 2,000 collections and 113,376 addresses, Runestone promises to provide a fair release for all participants. There is no team allocation for this airdrop, and it is entirely up toCommunityDonate to support. Users can do so here (https://runestone.lfg.cash/) to track their wallet eligibility.

Distribute Runestones to Ordinals holders

Our Thoughts on Runes

Despite having no apparent new use cases, runes represent a new form of entertainment, speculation, andCommunityA new way to build. We like that it is built on Bitcoin, a solid foundational asset and store of value. When Runes launches, it could reinvigorate Bitcoin by attracting liquidity and attention, essentially turning it into a bustling casino ecosystem capable of generating massive transaction fees.

While many new token standards have failed, we believe Runes may endure as a new fungible token standard due to the reputation of its creator (Casey) and the already high anticipation and acceptance among the Ordinals community.

The total market cap of BRC-20 tokens is currently $4.1 billion, with the leading token Ordi accounting for $1.5 billion of that market cap. This gives us an idea of the potential size of the Rune market.

Runes are likely to challenge existing BRC-20 tokens. We expect that after the launch of Runes, driven by the appeal of a shiny new token, there will be a significant shift in funding from BRC-20 tokens such as ordi and sats to Runes. Of course, this depends on the technical deployment of Runes going live without major problems.

Warning: Similar to memecoins, most runes will likely end up having little value, trending towards zero. Only those that can attract attention and build communities around them will survive.

Ordinals Collection Worth Noting

Unlike Ethereum, it is not so simple to link multiple inscriptions/NFTs to a single collection. Parentage is the industry standard today for creating collections of inscriptions with clear provenance. Danny (Onchain Monkeys) made an insightful tweet on this topic, showing the top ten collections that utilize this approach:

While the top PFP collections by reserve price are still mostly made up of Ethereum NFT collections like Punks and Bored Apes, Bitcoin Ordinals are catching up, with 3 Ordinals PFP collections (Quantum Cats, NodeMonkes, and OMB) making the top list.

If we consider the value of these top PFP collections relative to the total market cap of their native chains - Bitcoin's market cap is 3x that of Ethereum, but Bitcoin's top Ordinal collections are 1/3 the price of CryptoPunks. There is reason to believe that the top Ordinals collection has the potential to rise significantly.

Quantum Cats

Quantum Cats is a collection of 3333 recursive ordinal inscriptions launched by the Taproot Wizards team. The collection pays tribute to Satoshi Nakamoto as its origins can be traced back to the OP_CAT script function (included in the original Bitcoin codebase), which was subsequently removed by Satoshi in 2010 as it posed a risk to the Bitcoin network.

One of the goals of Quantum Cat is to revive the OP_CAT function.SafetyThe project aims to pave the way for cross-chain BTC transfers and strengthen the development and improvement of the Bitcoin Layer 2 network. By leveraging Quantum Cat, the project is committed to drawing attention to the proposed BIP upgrade while also providing an educational platform for the wider public.

The Quantum Cat series will gradually change its artwork through a process called "evolution inscription". Each version of the Quantum Cat is inscribed in advance, and the evolution process is encrypted by the team. These artworks will evolve in a deterministic way according to the OP_Cat proposal process. It is uncertain whether the characteristics of the new evolution will affect the rarity, so the current "rarity" and appearance of the Quantum Cat are subjective.

The collection is divided into two different groups - "Dead Cats" and "Live Cats" in a 50/50 ratio. The collection was initially minted on February 7 at a price of 0.1 BTC per NFT, raising a primary revenue of 300 BTC (approximately $13.3 million) for the Taproot Wizards team.

Given its origins and purpose, QuantumCats can accumulate value through its culture and community over time, especially if people believe that ordinarys and the Bitcoin ecosystem will become larger in the coming years. It brings together people who want to participate in the collective movement to upgrade Bitcoin.

Holding a cat could be good for the upcoming Taproot Wizards casting (no date has been set yet), since they are from the same team. In the meantime, its market value could serve as a test for Taproot Wizards before it launches.

Catalysts for 2024:

If this BIP upgrade is implemented, the Bitcoin soft fork will include the revival of the OP_CAT functionality. Activation is still a long way off, but if this BIP proposal passes, we could see a surge in attention and price for Quantum Cats.

Nodemonkes

NodeMonkes are the first Ordinals PFP set of 10,000 to be inscribed on Bitcoin, with inscriptions in the 83k-110k range. While they were inscribed last February, the anonymous team behind the project waited until the Ordinals infrastructure was more mature before launching in December 2023. The main sale was conducted via a Dutch auction, with 8,000 NFTs offered to collectors on December 21st of last year. The final price of Monkes was set at 0.03 BTC.

The collection contains a series of fun features that showcase crypto-native inside jokes and memes fused with original creations. For example, its features reference well-known CT meme culture like Pepe, BTC maxi, laser eyes, and even Aliens on CryptoPunks. Collectors can use Monkedex to check the official rarity of each NodeMonke PFP.

The narrative brewing around NodeMonkes is simple: Monkes are CryptoPunks for Bitcoin. No roadmap or execution risk. With less than two months since launch, we think it may be too early to award Monkes the title of de facto CryptoPunks for Bitcoin – to truly earn that title, community members should continue to become influential builders and thought leaders in the Bitcoin space (just like CryptoPunks did with Ethereum). But if enough people believe in this narrative, it could come true.

NodeMonkes was actively traded after its launch, with the average price peaking at 0.32 BTC on January 5, and the trading volume peaking at 594 BTC (about $26.8 million) in the first week of January. After a short cooling-off period, NodeMonkes experienced another upswing on February 19, with the collection volume rising from 0.15 BTC to 0.4 BTC on February 26. The project team mentioned that more Ordinals airdrops would be provided to NodeMonke holders, which drove this upswing. As well as mentions from well-known KOLs on Twitter, such as The Crypto Dog, Kevin Wu, and hentai avenger.

The team customized 400 honorary NodeMonkes to honor CT celebrities such as Claire Silver, Grant Yun, and Batz. With a consistent visual language, the series has become iconic within the Bitcoin Ordinals ecosystem, similar to the Nouns glasses, and is instantly recognizable.

Bitcoin Frogs

Launched on March 8, 2023, Bitcoin Frogs is a collection of 10,000 PFP ordinals minted on Bitcoin via the Lightning Network. Created by Frogtoshi Nakamoto, each tier in the collection features equal rarity. This fosters a subjective appreciation for aesthetics and satoshi-based rarity.

Bitcoin Frogs stands out for its fair launch (distinguishing it from Nodemonkes), with the entire series minted for free, excluding transaction fees. The project has fostered a vibrant community on X using expressions like "Ribbit!" and "Frogs follow Frogs." The Frog PFP also acts as a social network, with holders regularly tweeting their frogs to express their loyalty and belonging.

Although the activity has decreased after the inscription hype in May last year, when the main L1/L2 Activity and interest picked up again in November when inscriptions began to appear, and the Bitcoin Frogs reserve price rose again.

What makes Bitcoin Frogs so popular? Frogs resonate deeply with crypto culture, drawing inspiration from the popularity of Pepe the Frog. The collectible also holds significance as one of the earliest Ordinal PFP collectibles and the first to be minted over the Lightning Network. Bitcoin Frogs can be seen as one of the cultural faces of the early Ordinals ecosystem, a symbol for participants to demonstrate their pioneering status.

OMB (Ordinal Maxi Biz)

OMB is an Ordinals PFP project started by pseudonymous founder Zkshark in collaboration with artists Tony Tafuro and Nullish. The collection contains 2091 hand-drawn PFPs, each uniquely categorized by eye color, including green, red, blue, and the newly introduced orange eye feature.

The first to be inscribed was the Red Eye, which consisted of 92 PFPs inscribed in the sub-100k inscription range. The Blue Eye was inscribed next, consisting of 99 PFPs inscribed on Block 78 (“Halfinnie”) sats. The Green Eye was inscribed last, with a total of 1900 PFPs inscribed on Block 9 sats.

Among all the Ordinals inscription series, OMB has one of the highest reserve prices (0.76 BTC/38,000 USD) and sales. After the Ordinals hype last November, the reserve prices of many other series have dropped, but the reserve price of OMB has been steadily rising.

It is worth noting that more than 3,000 new OMBs with orange eyes were inscribed on Bitcoin during the 2024 Super Bowl, with some of these inscriptions appearing on some of the oldest Bitcoin sats. These products are not yet available, and it is worth keeping an eye out for related announcements.

The project describes itself as a movement that has some similarities to Goblintown in terms of cultivating a dedicated community. Serious OMB collectors see these PFPs as more than just a derivative of punk, but as thoughtful works of art that support important political statements. For example, OMB-themed graffiti appeared on the streets of London, advocating "Buy Bitcoin, Free Ross (founder of the dark web Silk Road)", symbolizing a protest against the establishment. Collecting OMBs can serve as a form of solidarity with this movement.

Additionally, OMB has partnered with Luxor Technologies to allocate a portion of its funds to mine Bitcoin. Proceeds will be used to reserve the treasury and fund OBounties, which rewards developers, educators, and community members who contribute to open source projects that align with Bitcoin's core values. Educational bounties will be awarded exclusively to OMB holders based on effort and engagement. Holders are also encouraged to propose bounties for consideration.

Interestingly, OMB does not have a Discord server, and all of its community coordination takes place on Twitter.

Pizza Ninjas

Pizza Ninjas is brought to you by the team behind Ninjalerts, a free and easy to use game for web and mobile applications.BlockchainData insight tool that sends real-time push notifications for NFT-related activities. Founder Trevor is a well-known investor and influencer in the Bitcoin space and runs a popular Twitter Space show.

The Pizza Ninjas series, consisting of 1500 PFPs engraved on rare pizza sats, was launched on January 17th at a mint price of 0.03 BTC. Notably, it is the first Ordinals PFP series to feature a high resolution of 2000x2000 pixels, utilize recursion, and have dynamic features that change based on Bitcoin block height. We like that it is a thoughtfully designed PFP series, which is detailed in their design whitepaper.

Each Ninja PFP acts as an interactive application, offering features such as a built-in animation editor, one-click social media stickers, and an on-chain Super Nintendo emulator for games within the PFP.

Owning Pizza Ninja PFP grants a lifetime license to Ninjalerts' Ordinal Portfolio Tracker and Wallet Viewer software. Additionally, PFP acts as a membership pass to their alpha group, providing collaboration and license list giveaways for top projects.

Despite the rich feature set, Pizza Ninja's base price has dropped from the initial days after launch and currently hovers around 0.05 BTC (an increase of 66% compared to the mint price). In the long run, the project aims to become the world's top Bitcoin native IP - an ambitious vision that will take a lot of time and effort to achieve.

Catalysts for 2024:

• Ordinals enters a crazy bull run. This drives demand for the Ninjalerts product suite as it facilitates early mint sniping and tracking of new project launches. Pizza Ninjas is the gateway to access this product suite.

• Collaboration and partnership launch

Bitcoin Art

During our conversations, many artists observed the Ordinals space with keen interest. The fascination lies not only in the art itself, but also in the innovative processes behind it, such as recursive techniques and remixing of existing artworks. Ordinals art is also fully on-chain, which makes it different from most NFTs. This environment echoes early digital art explorations on Ethereum, where boundaries were constantly tested and expanded.

A striking example of creative use comes from artist SpZjulien, who inscribed a personal audio file for piano onto Bitcoin. This approach allows the creation of a completely on-chain song through recursive inscription, demonstrating the vast possibilities of artistic composability on the Bitcoin chain.

However, Ordinals present unique challenges to artists, particularly in terms of file size limitations, which directly impact the feasibility of creating and trading high-quality, complex art. For example, the cost of engraving a 1MB AI-generated image on Ordinals can run into thousands of dollars, positioning such works as exclusive status symbols for the wealthy rather than an accessible art form.

The limitations imposed by Ordinals have led to a surge in p5js-based collections, with less emphasis on 3D art. Ordinals artists are increasingly drawn to art that reflects the characteristics of the Bitcoin network or integrates the data within it, creating a unique blend of technology and creativity. Despite these innovations, the practical limitations of Ordinals force artists to work within a limited range of expression, which is particularly challenging for narrative art that requires large amounts of data bandwidth.

Due to these limitations, rasterized art (pixel-based) or complex vector-based engraving has become prohibitively expensive, prompting artists and collectors to seek less expensive alternatives. However, a narrative is emerging that early, high-quality raster art could become very valuable due to its rarity.

One creative solution to these limitations is to use recursion in Ordinals’ generative art. The artist inscribes a core script, which subsequent artworks use as a basis, adding unique data to generate different outputs. This approach significantly reduces the size and cost of each inscription.

Despite these innovations, discoverability remains a challenge in the field of generative art, highlighting the need for improved platforms that can showcase and promote Ordinals art.

FloraForms by Harto

FloraForms is a 10,000-piece fully on-chain generative art collection made by artist Harto in collaboration with the Belvedere Museum in Vienna. It was inspired by Gustav Klimt’s The Kiss and its work is said to resemble generative art. It was launched on February 14th for free (only the inscription fee is charged) and currently has a reserve price of 0.003 BTC ($150).

The collection uses parent-child provenance, allowing for clear provenance of the collection on-chain. This benefits collectors, future dapps, marketplaces, wallets, and explorers without the need for off-chain references. Generating the collection uses recursive inscriptions: each piece is over 2 megabytes when downloaded, but the inscription is only 160 bytes. The parent recursive inscription is also created efficiently through compression and is only 12 KB.

Harto's Golden Ratio

Another Ordinals art collection that has been in high demand in recent weeks is Harto’s Golden Ratio, curated by VIVID Gallery. The project is free to mint, has a supply of 420, and currently has a reserve price of 0.1 BTC ($5,200). It is perhaps one of the most interesting generative artworks on Bitcoin today.

Harto's collection combines the Fibonacci sequence with recursive algorithms and fractal geometry, offering a glimpse into the harmony between numbers and nature. Inspired by cosmic symmetry and chaos theory, each piece showcases the beauty of randomness and order. The collection's aesthetic draws heavily from cryptography and the Bauhaus movement.

The Golden Ratio is remarkable because it is both "recursive" and "incantatory." Recursive inscriptions can refer to data from other inscriptions. Due to its recursive artistry, it can become the "holy grail" of recursive collections, perfectly expressing the golden ratio, the hallmark of natural proportions.

The “mantra” inscription is an important historical moment in the history of Ordinals and was previously ignored by the Ordinals Indexer, resulting in negative numbers. This has since been fixed with an update. Mantras like the Golden Ratio may hold a special place in the origins of the growing Bitcoin Art and Culture movement.

0xfar's FLARES

0xfar is known for being the artist behind Taproot Wizards and Quantum Cats, two of the most popular Ordinals projects. In February 2024, he launched FLARES, a 512-piece generative art collection from the PARALLAX series.

FLARES explores world building, terraforming and has atmospheric elements, with 21 different types, each with a distinct and dynamic look. It was created through algorithms using Three.js. It debuted on Gamma via a Dutch auction and quickly sold out at a base mint price of 0.015 BTC.

There are already more OG crypto artists experimenting on Ordinals and publishing some of their work. Examples include:

• Dutch-Canadian artist Ryan Coopman’s “The Origin”

• Jack Butcher, known for his checks and Openen series on Ethereum, has placed a series of 100 Ordinals checks as digital relics on Bitcoin.

• Rare Pepe Artist Rare Scrilla Artwork

Another challenge facing Bitcoin art is that it is fragmented today, with no platform or community that can convincingly become the “Art Blocks” of the Ordinals. This makes it harder for collectors to discover artworks they like.

• Inscribing Atlantis: is a new platform for “digital artifacts on the Bitcoin monolith.” Its next release is a collection of 1/1 photos by Alex Kittoe and Nevin Johnson called “Frames of Fragments.”

• Quadrillion art: The first volume of the collection was released, featuring work by 21 artists including Amber Vittoria and Dirty Robot. A second volume may be released later this year.

• VIVID: is a relatively new community initiative that invites generative artists to engrave curated collectibles on Bitcoin. Harto and Cybersea are two of the artists featured on the platform.

Sotheby's Auction

Sotheby’s has successfully held 2 Bitcoin Ordinals auctions in the past 3 months alone, which shows the strong demand for Ordinals artworks. The first is a series of 3 BitcoinShrooms, which look back at the first 13 years of Bitcoin in a pixelated way and pay tribute to the 8-bit art style. They are one of the earliest Ordinals, with the number of inscriptions

After this initial success, Sotheby's auctioned off a series of works of art and rare sats, all of which were snapped up, often at prices far above their estimated values. Cumulative sales totaled $2.4 million, demonstrating the strong interest in Ordinals art.

Digging deeper into the auction results reveals some interesting trends regarding the valuations of these digital artifacts:

• Artworks with lower inscription numbers are highly sought after, especially those numbered below 100. For example, a work simply inscribed “Inscription 21” achieved a staggering $101,000, largely due to its early provenance.

• Even artworks with a high number of inscriptions can achieve significant sales prices. The Genesis Cat is the most expensive Ordinal sold by Sotheby’s to date, selling for $254,000. Despite having more than 54 million inscriptions, its value is based on its uniqueness as a one-of-a-kind piece from the Quantum Cat series.

In summary,BlockchainArt is still in its infancy. Bitcoin’s unique properties provide fertile ground for artists and collectors to explore and redefine the boundaries of digital art.

Bitcoin Meta Protocol

"Meta-protocol" is a loosely defined term that refers to protocols and token standards built on top of inscriptions. Multiple meta-protocols have been launched, including BRC-420, ORC-20, BRC-69, but all of them, with the exception of BRC-20, have struggled to gain significant traction. The release of Ord v1.0 marks an important milestone with the inclusion of a formal meta-protocol field in the inscription envelope. This innovation simplifies the indexing process, enabling more efficient identification of specific meta-protocols without having to check each inscription one by one.

Aaron from our research team covers this in more detail in his Alpha Feed post

Examples of meta-protocols include:

• BRC-420: BRC-420 was developed by the Merlin Chain team and gives the inscription a "royalty" function. Interestingly, the highest-priced BRC-420 is the Blue Box, which is a 10K collectible with a reserve price of 0.5 BTC.

• BRC-1024 aims to facilitate the creation of a new metaverse on Bitcoin, with a strong emphasis on metadata. This metadata provides a detailed description of a virtual object, stored as a text-based artifact in Bitcoin.BlockchainMore details can be found on their website

• BRC-100 extends the BRC-20 protocol by adding computing power and state to tokens, thereby expanding its utility. This includes features such as lending pools, airdrops, decentralized stablecoins, and governance protocols, and all BRC-100 extensions are interoperable across applications. More information can be found in their documentation:https://docs.brc100.org/

Each meta-protocol is developing its own ecosystem, but it is still early days and so far, actual applications and usage are limited. In addition to Runes and BRC-20, one such standard and community may be worth paying attention to - Trac Network.

Trac Network and Tap Protocol

Trac Network represents a comprehensive ecosystem of protocols and products, all originating from a community rooted in the BRC-20 standard (TRAC, market cap ~$100M) and led by the anonymous Bennythedev.

Trac Core is the first product in Trac Network, which aims to decentralize control of the Ordinals protocol by providing decentralized indexers and oracles managed by TRAC holders. The functionality of Ordinals and BRC20 relies heavily on indexers, with ord v0.9 being the main indexer. However, the introduction of ord v1.0 disrupted BRC20, prompting many to stick with previous versions, which highlights the importance and challenges of indexers.

Tap Protocol is the second product in Trac Network. The protocol introduces the TAP token standard, which aims to simplify complex financial transactions within the Ordinals ecosystem without the need for a Layer 2 solution.stealThe "listen" function ensures the verification of transactions, thereby improving flexibility and practicality.

Tap Protocol also successfully obtained $4.2 million in financing, led by Sora Ventures.

TAP protocol supports:

• Exchange and Pledge: Facilitate the exchange and pledge of assets.

• Liquidity Pool: Supports the creation of decentralized trading pools.

• Token Authentication: Allows verification of tokens within the platform, which can be used as in-game currency or items.

• TAP Art: Links Ordinals to the TAP Protocol Token to allow for fractional ownership of valuable artworks. This extension ensures that provenance and ordinal ownership of token deployments are maintained.

• Multisend functionality: Provides users with the ability to conduct multiple transactions simultaneously, simplifying the distribution of airdrop tokens.

• Multi-asset protocol: support for BitcoinBlockchainIt also pioneered a new type of token called “non-arbitrary token” or NAT

A look at GeniiData shows that most of the inscriptions minted daily among meta-protocols other than BRC-20 and Standard Ordinals are Tap related. We also want to highlight the Trac & Tap protocols as there are several airdrops happening:

Tap

Tap Protocol will launch its token TAP through an airdrop across two snapshots. The original ecosystem token TRAC will receive 80% of the available airdrop allocation, while PIPE will receive 20%. Holders who retain their tokens between snapshots will receive a boost of an additional 50% in the airdrop allocation.

The first snapshot is scheduled for February 28th, distributing the airdrop proportionally when the TAP token is listed. The second snapshot is scheduled for the second quarter of 2024, distributing the second batch of TAP airdrops to TRAC and PIPE holders.

KARMA

KARMA is the token of the OnChainMonkey community, a well-known NFT PFP community on Ethereum that is currently migrating to Bitcoin. It is not yet certain what utility this token will have. This is a vote of confidence that the OCM community has decided to support TRAC and commit to becoming a validator in the decentralized sorter. It is in the process of being released:

• 70%’s KARMA tokens will be airdropped to OnChainMonkey NFT holders, TRAC and PIPE token holders

• 20% will be allocated for token swap for TRAC. Full allocation and completion was completed on February 20th, tokens will be available on February 26th.

• 10% will be deposited into the community treasury

Liquidium: NFTfi on Bitcoin

Liquidium is a peer-to-peer (P2P) lending protocol tailored specifically for Bitcoin, leveraging Bitcoin-based assets such as ordinal inscriptions and BRC-20 tokens as collateral. This innovative approach is achieved through partially signed Bitcoin transactions (PSBT) and discrete logs.contract(DLC), all of which are executed on the Bitcoin network itself.

Similar to the P2P lending platform on Ethereum, borrowers can flexibly pledge their assets according to the conditions they deem appropriate, while lenders can provide loans according to their own risk preferences and term choices. The interest rate for borrowing on this platform is 20%.

Liquidium supports a variety of popular collections on Ordinals, including Nodemonkes, Bitcoin Frogs, and OMB. Lenders have the opportunity to earn competitive returns on BTC, with loan annual interest rates ranging from 65% to 100%.

Since its inception, Liquidium has provided a cumulative volume of more than 201.5 BTC (about $10.49 million) for 4,492 completed and active loans. Importantly, there is a clear upward trend in daily loans, indicating increasing demand. A points program is currently underway, and users can earn points by participating in lending activities on the platform.

BitSmiley – The Maker of BitcoinDAO

BitSmiley is a Bitcoin DeFi protocol that covers three DeFi verticals: stablecoins, lending, and derivatives. The protocol allows the minting of an overcollateralized stablecoin called bitUSD (based on the bitRC-20 standard), which introduces Bitcoin's first native stablecoin directly backed by BTC. The bitRC-20 standard provides more powerful features than the typical BRC-20 standard to support the operation of bitUSD. In order to mint more bitUSD, users must pledge BTC as collateral, similar to the DeFi on Ethereum.AI And other collateralized stablecoins.

In addition to stablecoins, the protocol also aims to launch:

• BitLending, a Bitcoin-native P2P lending protocol

• Credit default swaps (CDS) allow loans to be bundled and credit defaults to be assessed based on different default rates.

In the coming years, as the number of inscriptions will reach into the billions, Grail collectors may be attracted to early inscription numbers for their historical provenance. While a large portion of inscriptions below 10K consist of single random images, there are some more cohesive groups of these early inscriptions that may attract collectors' interest.

These include (but are not limited to):

Ordinal Punks: 100 Ordinal PFPs inscribed in the first 650 Ordinal inscriptions

Bitcoin Shrooms: 210 pixelated mushroom art inscribed in the first 1075 Ordinals

The Fiat Collection: The earliest Ordinals series engraved on Bitcoin, in the first 117 serial inscriptions

Inscribed Pepes: A collection of 69 1/1 "Pepe the Frog" inscribed in the first 2189 Ordinals

Planetary Ordinals: 68 on-chain art collections inscribed in the 1103rd Ordinals

Taproot Wizards: 2121st Ordinals PFP inscription among the top 2625 Ordinals inscriptions, led by Udi Wertheimer

Timechain Collection: 21 Ordinals watch artifacts engraved in the first 377 Ordinals

To illustrate our point, Inscription #2, depicting a dancing bird, sold on February 28 for a whopping 24.48 BTC (about $1.4 million), setting a record for the most expensive Ordinals inscription sold to date. It highlights the existence of serious collectors who are willing to invest heavily to own a piece of early Ordinals history. Looking ahead, it is conceivable that modern art museums may begin acquiring and displaying Bitcoin digital artifacts of significant cultural and historical value.

A full list of the sub-10k Ordinals collection can be found here. Additionally, our previous coverage of Ordinal Punks, Bitcoin Shrooms, and Taproot Wizards can be found here.

in conclusion

There has never been a more exciting time to explore Bitcoin.

Despite Bitcoin’s status as a trillion-dollar asset, until recently the majority of its capitalization remained passive. However, more and more users are actively participating in the Bitcoin ecosystem.

The Ordinals kicked off the event, spurring development activity on a largely dormant chain. Today, the Bitcoin landscape is vibrant and diverse, filled with memecoins, digital art, profile pictures (PFP), layer 2 solutions, and DeFi products. This feels a lot like the explosive growth Ethereum experienced between 2020 and 2021.

Bitcoin remains in high demand and its continued development will continue to dominate the news. Builders unite in pursuit of sustainable transaction fees for Bitcoin. The launch of Runes during the Bitcoin halving in April will be a key event to watch.

There’s no doubt about it: 2024 is going to be a big year for the Bitcoin ecosystem.

The article comes from the Internet:Join the Bitcoin Ecosystem Craze with This Guide

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