A blockchain developer known by the pseudonym Mikael.btc, known as the creator of the BRC-100 token standard, aims to fork BRC-20 to develop a new protocol for the Bitcoin network.

Mikael.btc aims to introduce a new protocol that will enable decentralized finance on the Bitcoin network and plans to address various limitations of the BRC-20 standard towards this goal.

In a statement on X on August 9, Mikael.btc detailed how this fork will address the current limitations of the BRC-20 standard. The BRC-20 standard is a method for creating and managing tokens on Bitcoin, but it faces some significant limitations.

In particular, BRC-20 has a problem stated as “lack of programmability”. This deficiency limits the ability of developers to program certain features and functions related to the token.

Additionally, BRC-20 has scalability issues; This means token transactions may slow down under heavy use. The lack of DeFi infrastructure restricts the development and implementation of decentralized finance applications.

Mikael.btc states that the new protocol will use various technologies to solve these problems. In particular, it will leverage technologies such as Inscriptions and OP_RETURN to extend Bitcoin’s functionality.

Inscriptions is a technology that allows expanding Bitcoin satoshis with metadata. This technology allows adding data to the Bitcoin network and incorporating that data into the transaction. OP_RETURN is a script that makes it possible to store data in Bitcoin transactions. This script provides more information and functionality by storing data within transactions.

This new protocol is expected to enable access to decentralized finance for Bitcoin users. That is, users will be able to make financial transactions using DeFi applications on the Bitcoin network. This will enable Bitcoin to be used not only as a store of value but also as a platform for financial transactions.

It is stated that after the fork, BRC-20 token holders will automatically receive the corresponding assets in the BRC-100 protocol. This will be done through an arrangement that will make it easier for existing BRC-20 token holders to migrate to the new protocol.

However, users who hold BRC-20 tokens on the centralized exchange will need to wait for the exchanges to distribute the newly forked assets. This process may vary depending on exchange policies and may take time for some users.

Recently, the decentralized finance (DeFi) movement on the Bitcoin network has gained significant momentum. A research report published by crypto venture capital firm Pantera Capital predicts that the Bitcoin-based DeFi ecosystem could attract hundreds of billions of dollars of liquidity through web3 protocols.

This report states that Bitcoin’s DeFi sector can reach a market share comparable to Ethereum and has great potential in this field. These developments are considered an important step for Bitcoin to take on a broader role in the DeFi field and gain greater acceptance in the crypto world.