All You Need To Know About ASC-20 Tokens

At its core, the ASC-20 standard inscribes data onto the Avalanche blockchain, allowing users to mint, deploy, trade, and hold custom tokens for desired projects. Unlike traditional, non-fungible tokens (NFTs), ASC-20 inscriptions offer greater flexibility and scalability, enabling the creation of a wider range of assets, from loyalty points and stablecoins to fractionalized ownership of real-world assets.

The deployment of ASC-20 tokens has led to the creation and distribution of tokens like SNOW and ASCT. The SNOW project has gotten the attention of 30 million registered users, with its total supply of 21 million tokens fully minted out.

The project also has an ASC-20 AVAX market and an indexer for organizing data to enhance searchability on the Avalanche chain.

What are ASC-20 Tokens?

ASC-20 tokens are a standardized blueprint for inscribing assets onto the Avalanche blockchain. Like a common language on the blockchain, the standardized ASC-20 allows all users, whether individuals or enterprises, to effortlessly deploy, mint, and trade tokens customized to their needs.

The standard is inspired by the inscription standards on Bitcoin’s blockchain, such as the BRC-20. While the transactions on Bitcoin are processed with OP encoding, the ASC-20 standard uses JSON inscription format to reduce gas fees.

It’s also designed to refund unresolved funds when there aren’t miners to process a transaction. This design was chosen by the ASC-20 and Avalanche community.

History and Team of ASC-20

The ASC-20 standard is an open-source, community-driven project developed through collaborative efforts within the Avalanche ecosystem.

The Avalanche community members and developers are contributing to its design and implementation. This gives anyone access to its development, leading to transparency and improved adaptability in the community.

With a focus on decentralization, the project’s whitepaper outlining the framework and theoretical data is set to be released in December 2023, and the ASC-20 trading market is set to be launched in the same month. This would allow users to buy, sell, and transfer ASC-20 tokens freely.

At the beginning of 2024, the project would collaborate with the RGB protocol, allowing for permanently storing RGB data on Avalanche. By the middle of the year, the project would launch avaxmarket.com to onboard NFTs for users to trade unique assets.

By the end of 2024, the ASC-20 project will introduce inscription domain names, a feature that allows users to inscribe names onto the Avalanche blockchain directly.

How Does ASC-20 Work? Avascription, Token Escrow and the Protocol

Image Source: Twitter

Avascription

ASC-20 smart contracts are passive holders of ASC-20 inscriptions and tokens with little involvement in the movement and exchange of the tokens. Avascriptions, created through the ASIP-1, allow smart contracts to communicate and transfer ASC-20 tokens within the protocol.

The Avascription event, avascriptions_protocol_TransferASC20Token, is a translator between the sender (From) and the recipient (To). It verifies the transaction amount and validates the transaction, ensuring that the sender has the required amount and the transaction is valid.

Before the development of Avascription, smart contracts’ inability to initiate ASC-20 token transfers directly hindered the development of dApps, such as exchanges and marketplaces that require the interaction of smart contracts.

Avascription (ASIP-1) unlocked these development potentials in a cost-effective and efficient mechanism while fostering an interconnected ecosystem.

Token Escrow

The trustless escrow feature is important in ensuring a transparent exchange between parties. This was introduced with ASIP-2 as an enhancement to Avascriptions, which allows smart contracts to act as escrow agents for ASC-20 tokens and transactions.

The Trustless escrow event, avascriptions_protocol_TransferASC20TokenForListing, allows smart contracts to transfer tokens to a listing contract for safekeeping until a sale or transfer event is triggered.

The event ascertains the listing initiator (From) and the intended recipient (To) with a listing identifier (ID). Upon verifying the listing transfer, the Avascription protocol identifies the parties involved. If the verification meets the requirements, it executes a transfer of the ASC-20 token based on agreed terms.

Although ASIP-1 can carry out escrow transactions with manual monitoring and human input, ASIP-2 allows for the automation of escrow transactions, allowing developers to create a secure exchange or marketplace for ASC-20 tokens.

The ASC-20 Protocol

The ASC-20 protocol is a token standard for deploying, minting, and transferring inscription tokens on the Avalanche network. The ASC-20 protocol helps systems identify and process minting, deploying, and transferring events for ASC-20 tokens.

The ASC-20 token function requires the developer to specify the ASC-20 Protocol, the type of operation, and either deploying, minting, transferring, or listing operations. Finally, the developer must specify the token’s maximum supply and mint limit. When a user specifies the intended mint amount, the amount has to be less or equal to the mint limit set by the developer

The ticker is set during the first deployment of the token, and tickers are not case-sensitive. The maximum supply of a token cannot exceed the largest possible value stored in an unsigned 64-bit integer data type, the unit64_max.

How to Deploy, Mint, and Transfer ASC-20 Tokens

The steps taken to mint, deploy, or transfer ASC-20 tokens are similar. The major difference in each step is the data filled in the “Type of Event” section. The “mint” command is used for minting, while the “deploy” command is used to deploy tokens. Likewise, the “transfer” command is used to transfer ASC-20 tokens.

Deploying ASC-20 Tokens

To deploy an ASC-20 token, visit the token page on Avascriptions.com and connect your wallet. Ensure your wallet is compatible with the Avalanche blockchain. Click on the deploy button and input the necessary data. You may be asked to input a ticker symbol. In this example, the symbol “avav” would be used.

After clicking the deploy button, you will be redirected to your wallet, where you can sign or approve the transaction. Gas fees in AVAX would be required for the transaction to be approved.

When ASC-20 tokens are deployed, it means a transaction with the command below has been initiated:

{

“p”: “asc-20”,

“op”: “deploy”,

“tick”: “avav”,

“max”: “1463636349000000”,

“lim”: “69696969”

}

Minting ASC-20 Tokens

To mint ASC-20 tokens, you will need to initiate a transaction with the rules below:

{

“p”: “asc-20”,

“op”: “mint”,

“tick”: “avav”,

“amt”: “69696969”

}

Transferring ASC-20 Tokens

To Transfer ASC-20 tokens, you will need to initiate a transaction with the rules below: \
{

“p”: “asc-20”,

“op”: “transfer”,

“tick”: “avav”,

“amt”: “69696969”

}

Use Cases For ASC-20 Tokens

Image Source: Avascription Website

Similar to the functionality of BRC-20 tokens like ORDI, TURT, and PIZA on Bitcoin, ASC-20 tokens are unlocking some important use cases on the Avalanche blockchain, from playful meme tokens like DINO to intricate inscription NFTs and secure marketplaces like Avascriptions.

SNOW

Image Source: Twitter

The Snow project is the first ASC-20 ordinal on the Avalanche chain, helping to pioneer the movement of inscriptions on Avalanche.

The project supply is capped at 21 million, with over 200 users holding the inscription token. The project has plans to create a marketplace for SNOW tokens.

Avascriptions Marketplace

Image Source: Avascription Website

A potential use case for the ASC-20 standard is the creation of the Avascriptions Marketplace for trading ASC-20 tokens on the Avalanche chain. The project includes an indexer that arranges and indexes ASC-20 inscription data for easier searchability and user accessibility.

The AVAX trading market uses the unspent transaction output (UTXO) model for security. The trading model uses the individual funding history of each transaction to ensure transparency. Unlike Bitcoin, which uses the OP encoding technique to process transactions, the Avalanche network uses the JSON inscription format that is modified for cost-efficient gas consumption.

In situations where there isn’t any available miner to process a user’s funds, the project is designed to automatically refund the owners of the token as a potential solution to unresolved transactions.

The Verified Badge Feature in the ASC-20 Trading Space

The avascription marketplace has a verified badge feature designed to encourage a healthy trading environment while recognizing the achievements and contributions of specific inscriptions in the ASC-20 trading space.

Avascriptions marketplace verified badge system awards different levels based on the trading volume of that inscription, which symbolizes their contribution to the project. The levels range from ASC-20 Eco-Builder to ASC20 Eco-Legend, each with its color coding.

The ASC-20 Eco-Builder is a blue badge given to projects with an AVAX trading volume of 20k. The ASC20 Eco-Pioneer is a golden-colored badge reserved for projects with a trading volume above 100k AVAX tokens.

The ASC-20 Eco-Navigator is a red badge that requires a trading volume above 500k AVAX tokens. Finally, the ASC-20 Eco-Legend is a legendary badge that requires an AVAX trading volume of over 2.5 million AVAX tokens.

This tiered system acknowledges the achievement of teams while encouraging developers to develop more tokens using the ASC-20 protocol.

Avaxmarket.com

The ASC-20 standard allows the Avalanch project to launch an inscription NFT marketplace. The NFT marketplace will launch in mid-2024, allowing users to mint inscription NFTs using the RGB data inscription feature on the AVAX chain.

The NFT marketplace allows the trading of inscription NFTs, which developers can use to create games, identity projects, and ownership of physical assets. These assets are transferable to the intended users.

DINO

The DINO project, the first animal meme inscription token on Avalanche, has become famous for its interactive yet playful community. It has over 38k holders with a fully minted supply of 2.1 quadrillion inscription tokens.

The Growth of the ASC-20 Standard

Looking at the trend of Ordinals and BRC-20 on Bitcoin, the prospects for ASC-20 on Avalanche are high. Within the first month of introducing inscription tokens on Avalanche, the trading activities and transactions on the Avalanche chain surged by 2,000% in less than a week, pointing towards a positive reaction to ASC-20 tokens.

Since ASC-20 is a community-driven project with long-term utility and use cases, the adoption rate for ASC-20 projects is expected to increase drastically.

Although the ASC-20 standard is a fresh addition to the crypto and blockchain space, ASC-20 tokens are gradually gaining traction. The inscription data of tokens like Avav, Dino, Bull, and Tduck can be tracked on Dune Analytics, one of the biggest blockchain analytics platforms. Data from Dune Analytics shows that the Avascription platform has a market cap of $95 million. Also, a few of these, like Avav, have been listed on Coingecko and Coinmarketcap.

Image Source: Dune Analytics

The above chart on Dune shows the ASCT token fully minted with over 11,000 holders, and the distribution of tokens is somewhat varied. The top holder has over 60k tokens, while the 25th largest holder has 19k tokens.

The most recent mint activity occurred on December 22, 2023, at block 39351903, with 4 mints of 2 tokens each. This transparent data shows the minting and movement of tokens to decide how centralized it is, the movement of whales, and the possibility of a rug pull.

The most popular ASC-20 projects are DINO, SNOW, ATOM, and SMOL. DINO is the first animal meme inscription on the Avalanche chain, while SNOW is the first ASC-20 ordinal.

Conclusion

The ASC-20 token standard is one of the most recent additions to the inscription trend within the crypto space. ASC-20 is a token standard on Avalanche that allows users to mint, trade, and hold ASC-20 tokens or NFTs as inscriptions.

As an open-source project, ASC-20 is developed by members of the Avalanche community to establish its whitepaper, token market, NFT market, and RGB data inscription. Similar to its development team, the project is built to be decentralized.

It uses Avascriptions to allow smart contracts to transfer assets and Token escrows to power decentralized exchanges and finance projects without the need for centralized entities or third parties between transactions.

The launch of the ASC-20 token standard has increased the trading activities on the Avalanche chain by 2,000% in less than a week, hinting towards a more bullish year ahead for ASC-20 tokens and projects. Although the project is in its infancy at the time of writing, community support, beacon developers, and crypto enthusiasts pay attention to the ASC-20 standard.