SRC-20

Overview

SRC-20 is a token standard built on top of Bitcoin using the Bitcoin Stamps protocol to inscribe arbitrary data onto unspent transaction outputs (UTXOs). By writing token metadata and issuance commands directly to UTXOs, SRC-20 enables the creation and management of fungible tokens that coexist with Bitcoin’s native currency. The standard is conceptually similar to other experimental token layers such as BRC-20, but it relies on a different inscription and storage mechanism that emphasizes immutability and permanence of stored data.

Core Capabilities

1. Immutable Data Storage: SRC-20 uses Bitcoin Stamps to write token-related data onto UTXOs. Because this data is attached to transaction outputs, it cannot be pruned in the same way some witness data can, ensuring a high degree of permanence and immutability for token metadata and issuance records.

2. Fungible Token Issuance: The standard supports the creation of fungible assets that behave like tokens on other chains. Creators can mint, transfer, and track token balances using inscriptions anchored in Bitcoin transactions, enabling token-like economics while leveraging BTC for settlement.

3. Arbitrary Payloads: Creators can attach data of variable and arbitrary sizes to Stamps, which allows for flexible token metadata, richer issuance scripts, and custom behaviors. This flexibility enables more complex token designs, at the trade-off of potentially higher transaction fees for larger inscriptions.

4. BTC Fee Settlement: All token activity on SRC-20 is settled through Bitcoin transactions, meaning transaction fees are paid in BTC. This ties token operations directly to the underlying Bitcoin fee market and security properties of the Bitcoin network.

5. Parallel Operation with Native Bitcoin: SRC-20 tokens operate in parallel with native Bitcoin UTXOs rather than modifying the base currency. They extend utility without changing the Bitcoin protocol, leveraging existing transaction primitives for token operations.

How It Works

SRC-20 inscriptions are created by encoding token-related commands and metadata into Stamp inscriptions on UTXOs. These inscriptions are then included in Bitcoin transactions, and once confirmed, they form an immutable record on the blockchain. Wallets and indexers that understand the SRC-20 standard can parse these inscriptions to determine token supply, transfers, and balances. Because inscriptions live on UTXOs, they are not subject to the same pruning or witness-data modification that can affect other approaches, which supports a design goal of permanence.

Comparison with BRC-20

SRC-20 is often compared with BRC-20. The primary differences lie in storage location and pruning behavior: BRC-20 uses Ordinals to store data in transaction witness sections, which can be smaller and cheaper but potentially subject to pruning by some node configurations, whereas SRC-20 writes to UTXOs via Stamps and avoids pruning at the cost of potentially larger transaction sizes and higher fees. Adoption level also differs: BRC-20 has seen broader marketplace and tooling support to date, while SRC-20 remains relatively early-stage with limited wallet and exchange integration.

Why It Matters

SRC-20 demonstrates a pathway to expand Bitcoin’s utility beyond simple value transfer by enabling fungible token issuance anchored directly to UTXOs. Its emphasis on immutability, flexible data payloads, and direct settlement in BTC make it an interesting option for developers who prioritize permanence and on-chain data integrity. However, the trade-offs include higher transaction costs for large inscriptions and a smaller ecosystem of compatible wallets and services.

Recommended Use Cases

1. Projects that require long-term, immutable token records and on-chain metadata.
2. Experimental or niche token issuance where permanence is prioritized over minimum fees.
3. Developers exploring alternative token standards on Bitcoin who want UTXO-based storage semantics.

Overall, SRC-20 expands the conceptual boundaries of what can be built on Bitcoin, offering a distinct set of properties compared with other token approaches. As tooling and adoption grow, it may become a viable option for specific use cases that need durable on-chain token records.