The SRC-20 Token Standard is a framework for creating fungible tokens on the blockchain, Stellar, adhering to the Bitcoin Stamps protocol. Fungible tokens are digital arts, that can be easily exchanged with currency offering the same value. With the pre-defined rules and guidelines, it can be ensured that they can be traded, stored, and transferred in the Stellar Network.
Each token is expected to hold the same value and can be easily exchanged. The SRC-20 Standard makes token creation easy and fast, at low transaction cost. Developers can use SRC-20 tokens to store and trade different types of assets on the Stellar network, with seamless integration of wallets, allowing developers to create, manage, and use these tokens.
What is the SRC-20 token Standard?
Similar to Ethereum’s ERC-20 token, it represents a new token standard created using the Stamps Protocol. Users can encode digital images in JPG, PNG, and GIF formats for Bitcoin’s transaction output, by creating a base64 string format. This ensures immutability, keeping the transactions safe and secure on the blockchain. Unlike the Ordinals, all transactions are stored in UTXO outputs without allowing any alteration to the transaction data. However, the image file size is limited to 24 x 24 pixels.
Key Features
- Immutability: SRC-20 token standards are less prone to deletion or alteration of data, as it is stored in the Bitcoin UTXO (Unspent Transaction Output). This ensures that no data is removed from the blockchain.
- Security: Employs efficient security measures like data encryption and multi-sig wallets to safeguard digital assets from threats and attacks.
- Interoperability: It is designed to seamlessly integrate with other blockchains, wallets, and decentralized applications. This improves liquidity, and efficiency, to broaden usability.
- Liquidity: SRC-20 tokens increase the liquidity of assets, allowing quick and transparent transactions. It also gives opportunities for businesses and creators to expand their assets or art to raise capital.
What are the major uses of SRC-20 Tokens?
SRC-20 Tokens can be used across industries, enhancing the functionality and accessibility in several sectors:
- Decentralized Finance (DeFi)
It operates by reducing the dependence on traditional financial norms, and by integrating with DeFi protocols to facilitate seamless lending, borrowing, and trading activities. It also functions as governance tokens or utility tokens in DeFi protocols.
- NFT
Allows digital creators and artists to store their digital art collections on-chain without the risk of theft or loss. It can be used to represent the holding of real-world assets such as real estate or stocks.
- Gaming
In-game assets and collectibles can be stored as SRC-20 tokens. This allows players to store their rewards and achievements in a secure place.
What is ERC-20 and how is it different from SRC-20?
While the SRC-20 token is known to be named after ERC-20 and shares several functions, these tokens have significant differences:
| Feature | SRC-20 | ERC-20 |
| Blockchain | Bitcoin’s Blockchain by integrating STAMPS | Developed on Ethereum Blockchain |
| Data Storage | Stored in Bitcoin UTOX | Store in Smart Contracts |
| Speed | fast | moderate |
| Transaction fees | high | Generally lower than SRC-20 |
| Scalability | High | Limited |
How to create SRC-20 tokens?
An SRC-20 Token is created on the Bitcoin Blockchain using the STAMP protocol. It involves a series of steps such as:
1. Understand the purpose
It is essential to determine the need and purpose of the token such as its role, features required, and total supply. Be clear with its use and decide on the images that will be embedded with the token.
2. Select the tools and network.
Choose the required programming language and tools that align with your requirements and blockchain protocols. Also consider other factors like transaction fee, security, and development assistance.
3. Create Token
Token can be developed with STAMPS protocol, where all requirements mentioned in the first step are encoded into the blockchain. It specifies the name of the token, its symbol, supply, transfer, and other important information.
4. Testing
Once the tokens are created, it must tested by minting and burning the tokens. Once minted, it can be transferred to wallets, allowing further transactions. Check if it is error-free to deploy the token on the blockchain. Confirm the transaction.
5. Assessment
Once live on the blockchain, verify your regulatory standards if required. Assess your Smart contract to identify vulnerabilities, if any.
6. Distribution
Distribute tokens through airdrops and rewards. Integrate it with other wallets, and exchanges within the blockchain.
Advantages of SRC-20
- Accessibility: Facilitates smooth integration and cross-border transactions, enabling worldwide accessibility.
- Permanence: As the data is stored in UTOX, it cannot be tampered with or removed in any case. This secures the data, making it less prone to vulnerabilities.
- Defi: The tokens can be integrated with several DeFi protocols to enable trading, borrowing, and lending activities.
- Ownership: It enables fractional ownership of NFTs, real estate, and other valuable assets to increase liquidity.
Conclusion
The SRC-20 token standard utilizes the Bitcoin blockchain to facilitate several functions ranging from creating and storing digital assets on the blockchain. This ensures the immutability and security of the transaction and assets stored. It simplifies the process of issuing tokens, tokenization of assets, and other functions seamlessly. It is developed to address the requirements with security concerns in NFT, DeFi, and the gaming ecosystem, opening new opportunities for owners and investors. With factional ownership as a feature, it has increased accessibility to several assets that were previously considered illiquid. With its effective focus on security and innovation, it is expected to open new opportunities in the coming years.