BRC20 Token Liquidity Challenge in the Secondary Market

2 min readJun 12, 2023

Current situation of BRC20 tokens:

It shows a decline in popularity due to liquidity issues in the secondary market. Despite the initial excitement and demand, the lack of liquidity has become a significant factor affecting the overall interest in BRC20 tokens.


Reasons for the Initial Popularity of BRC20:

  1. Fairness: The cryptocurrency community has shown a preference for fairness, especially after instances where venture capitalists dominated the market. BRC20 tokens offered a more inclusive approach, allowing anyone to mint tokens and participate in the primary market.
  2. Speculative Investment: Many individuals were attracted to minting BRC20 tokens in the primary market with the intention of selling them in the secondary market for potential profit.
  3. Technological Advancements: The integration of BRC20 tokens with BTC Taproot upgrade provided a solid technological foundation for the ecosystem.

Reasons for the Cooling Down of BRC20 Popularity:

  1. Lack of Secondary Market Liquidity: Despite the minting of many tokens, only a negligible fraction can be traded on the secondary market, resulting in low liquidity.
  2. Aesthetic Fatigue: Continuous hype and activity in the BRC20 market may have led to a natural cooling-off period.

Solutions to Improve BRC20 Token Liquidity:

  1. CEX Listings: Although CEX listings can enhance liquidity, they may only address the liquidity issue for a limited number of popular BRC20 tokens. So, it may not be a comprehensive solution.
  2. Expansion of Marketplaces: While additional UniSat-like marketplaces can help with the trading of popular BRC20 tokens, they may not effectively address the liquidity challenges for a broader range of tokens.
  3. Development of a DEX Solution: Building a DEX similar to EtherDelta in 2017 for ERC20 tokens could be a significant requirement for the BRC20 ecosystem. Such a DEX would offer decentralized trading capabilities and enhance liquidity for a wide range of BRC20 tokens.

Solution to Creating a BTC-based EtherDelta-like :

ChainX currently supports EVM Layer 2 with BTC as gas fees. By deploying protocols like UniSwap on ChainX, users can access decentralized cross-chain functionality involving BTC. This approach aims to replicate the success of EtherDelta on the Ethereum network for the BRC20 ecosystem.

Solution to Achieving a Decentralized BTC Cross-Chain like Op Rollup:

By leveraging BTC’s EVM Layer 2, it becomes possible to implement any DeFi protocol from Ethereum on BTC.

This allows BRC20 assets on BTC to benefit from innovations in protocols like UniSwap and derivative protocols like GMX. Furthermore, lending protocols and cross-chain lending protocols based on BTC/BRC20 tokens can be developed.

This presents a significant opportunity for BRC20 tokens to thrive and establish their own era.

For more information, you can refer to the following article: “Bitcoin’s Fully Decentralized Cross-Chain Solution.”








ChainX is a BTC Layer 2 solution compatible with EVM that utilizes Bitcoin as a gas fee, serving as the predecessor network of BEVM.