STX20 Protocol: A New Breakthrough for Bitcoin Scalability on the L2 Network!
Amid growing demand for block space, the Stacks team believes that STX20 trials have demonstrated significant potential for scalability and efficiency. The STX20 protocol, inspired by the BRC20 token standard in Bitcoin, is the latest innovation in the Stacks ecosystem. This article will explain more about the STX20 protocol and how it works!
What is STX20 Token?
Source: Coinmarketcap
The STX20 token is a new exchangeable token standard on the Stacks network, a Bitcoin layer built for smart contracts and Web3 applications. The token is inspired by Bitcoin's new BRC20 token standard and was created as a result of the STX20 protocol. This protocol enables the creation and distribution of exchangeable, on-chain tokens on Stacks through data encryption to individual STX tokens. The STX20 protocol utilizes the transaction memo field to offer a more efficient and gas-saving alternative to conventional smart contracts for certain use cases in Stacks. STX20 tokens are built to be efficient, lean, and space-saving to fit within the memory limits of Stacks and maintain network integrity. Anyone can create STX20 tokens by minting them on STX20.com using Stacks-compatible Web3 Bitcoin wallets such as Xverse.
How STX20 Token Works
STX20 tokens are created using the STX20 protocol, a set of standards built on the Stacks blockchain. This protocol allows developers and users to embed data into STX token metadata. The protocol utilizes the 34-symbol limit of the Stacks transaction memo to save blockchain space and maintain network integrity during token encryption. All minting and transfer of STX20 tokens is done in a single transaction with the order of transactions within the block helping to determine the priority of transactions to be completed. Furthermore, all encryptions follow the Stack network's 64base format standard, which helps encode binary data as printable text and share information across different networks.
Difference Between STX20 and BRC20 Tokens
The STX20 protocol is inspired by Bitcoin's BRC20 token standard, which allows the minting and transfer of exchangeable tokens directly on the Bitcoin blockchain. The STX20 token is the BRC20 equivalent except for the Stacks blockchain. While BRC20 tokens are minted directly on the Bitcoin blockchain, STX20 tokens are minted on the Stacks blockchain, which is the leading Bitcoin layer built for the development of Web3 solutions secured by Bitcoin. Another difference between STX20 and BRC20 is that the STX20 team states that one of the main functions of the token is to bring more smart contract capabilities to Stacks, while BRC20 is primarily created to bring exchangeable tokens to the chain. Conclusion The STX20 protocol offers new possibilities in the Stacks ecosystem, paving the way for the creation of exchangeable tokens in a more efficient and resource-efficient manner. With its ability to enhance the capabilities of smart contracts in Stacks, the STX20 protocol marks an important step in the evolution of the Bitcoin blockchain and its wider potential applications.
*Disclaimer
This content aims to enrich readers' information. Always do your own research and use cold hard cash before investing. All crypto asset trading and investment activities are the responsibility of the reader.
