BTC20 harks back to April 2011, a time when Bitcoin’s supply was a modest 6 million units, and the cryptocurrency briefly fetched a price of $1. This historical reference led BTC20 to offer 6.05 million $BTC20 tokens at a price of $1 each.
As of Tuesday’s announcement, token staking is started on August 9th, while token claiming and decentralized exchange (DEX) trading will went live on August 10th. Since then, BTC20 has soared upwards of 100x with a market cap of $78 million.
Its tokenomics mirror those of Bitcoin, starting the clock in April 2011 when the price was $1, and the supply stood at 6.05 million.
BTC20’s maximum supply is 21 million. Differing from Bitcoin’s supply distribution, BTC20 coin will be distributed among existing stakers of the token rather than miners.
The issuance of BTC20 tokens aligns with the Bitcoin blockchain’s schedule, with rewards provided every block (approximately every 10 minutes) and halvings occurring approximately every four years, similar to the original Bitcoin blockchain. This means when you stake BTC20 you will earn rewards every ten minutes with those rewards reducing by half every four years.
This setup presents an exciting passive income opportunity for BTC20 token stakers.
In 2011, the Bitcoin blockchain was generating 50 BTC per block, roughly 2.6 million BTC per year. If all presale buyers staked their BTC20 tokens, potential yields could surpass 40%. Yet, considering not all will stake their tokens, even higher yields are possible due to the consistent issuance of new BTC20 tokens.
Depending on the size of the staking pool, yields might even exceed hundreds of percent.
Staking is expected to incentivize holding onto BTC20 firmly but of course, there will always be investors looking to sell once they are able to unlock their stakes.
BTC20 also boasts various benefits due to its direct issuance on the Ethereum blockchain. This includes access to the world of Decentralized Finance (DeFi) and reduced negative environmental impact compared to Bitcoin, thanks to Ethereum’s transition to proof-of-stake in 2022. It’s important to remember though that BTC20 is not Bitcoin and will not come close to Bitcoin’s value.
Invest at your own risk. You could lose 100% of your capital. This article is for informational and entertainment purposes only. It is not financial advice.