What is KRC20?

KRC20 is a token protocol similar to BRC20, operating based on preset rules to ensure compatibility and interoperability among various applications in the KASPA network. KASPA focuses on solving issues like decentralization and security faced by cryptocurrencies. Although KASPA is sufficiently secure and capable of peer-to-peer transactions, it is limited by the lack of smart contract functionality. KRC20 is a revolutionary product launched to address this, and while not a smart contract itself, it significantly expands the use cases of the KASPA blockchain network.

KRC20 is part of Kasplex, a comprehensive solution on the Kaspa network that includes token protocols, indexers, and APIs. Kasplex operates independently of Kaspa. The public beta of KRC20 launched on June 30, with the mainnet officially going live on September 15. Any user can use KRC20 to launch projects, with these tokens representing not just tokens but also points or voting rights. This means KRC20 provides a broader range of solutions for decentralized application scenarios and tokenized ecosystems.

Characteristics of KRC20:

Interoperability: Enables integration between existing applications and protocols. With KRC20 tokens, developers can easily conduct cross-platform transactions, interact with interoperable assets, and interact across various DApps.
Scalability: KASPA's innovation lies in the GhostDAG protocol, providing excellent scalability to support the efficient operation of KRC20 contracts. This feature allows KRC20 to achieve fast transactions, quick confirmation times, and high TPS, significantly improving asset transfer efficiency.
Flexibility: The KRC20 token framework is extremely flexible, allowing users to boldly design crypto projects with different token economics. Both enterprise and individual users can use KRC20 to deploy tokens as needed.
Community Collaboration: KRC20 has driven many new ideas on the KASPA network, creating new business models and supply-demand relationships for developers, enterprises, and individuals. The use of KRC20 tokens has brought the connection between these three to a new, positive height.

Use Cases for KRC20:

MEME: KRC20 is still in its early stages, and popular MEME coins in this cycle can bring considerable attention to KRC20 while also serving as a good stress test. Currently, almost all projects deployed on KRC20 are MEME projects, with some achieving notable success.
DeFi: In theory, KRC-20 tokens can enhance various DeFi applications such as DEXs, lending, and liquidity pools, strengthening permissionless access to various financial services and liquidity provision.
Tokenization: KRC20 tokens enable asset digitization, making it possible to digitize physical assets such as artworks, real estate, stocks, commodities, and other collectibles. This expands new liquidity for Kaspa, namely real-world assets.
NFT: KRC-20 tokens provide users with NFTs for various digital assets, in-game assets, digital collections, and virtual land. Thus, users can claim digital ownership and monetization models for various digital and physical assets.
Supply Chain Management: Even if real-world supply chain-type enterprises have needs, they can use KRC20 tokens to track, monitor, and verify supply chain transactions. It can help businesses maintain transparency, immutability, and data integrity throughout the entire supply chain.

Impact of KRC20 on Kaspa

In the design of KRC20, deploying tokens requires a transaction fee of at least 1000 KAS, while minting tokens requires at least 1 KAS. Fees are typically related to the complexity and size of transactions, ensuring more complex transactions pay higher fees, with all gas fees paid to miners. This mechanism brings many benefits, such as preventing malicious deployment of large numbers of tokens, reducing redundant data generation, and increasing miner incentives.

Since the launch of KRC20, the cumulative gas payments on the Kaspa network have approached 40 million KAS, with over 30 million KRC20 transactions and more than 900 tokens deployed. These data indicate the significant activity and popularity of KRC20 on the Kaspa network, demonstrating its important role in driving network development.

From actual data, the impact of KRC20's mainnet launch on the Kaspa network has been very significant. According to data from the Kaspa explorer (https://kas.fyi/), since the mainnet launch of KRC20 on September 15, Kaspa's daily active addresses have rapidly surged from less than 20,000 to a peak of over 90,000. Meanwhile, daily transactions have skyrocketed from less than 150,000 to over 8 million at one point. The significant growth in active addresses and transaction numbers has led to higher network utilization and greater community engagement, further driving the development of the Kaspa ecosystem.

For miners, according to HumPool's statistics comparing two 7-day periods before and after KRC20's launch, miner income on the Kaspa network has increased significantly after KRC20's launch. The average income per block has substantially improved, with mining fees soaring from less than 1 KAS to over 50 KAS, an increase of 46,092%, accounting for 60.05% of total income, up from 0.13%. This change has increased miners' daily income by nearly 60%, fully demonstrating the positive impact of KRC20 on miner income.

Differences between KRC20 and BRC20

KRC20 and BRC20 are homogeneous token protocols for Kaspa and Bitcoin, respectively. In terms of business processes, they are very similar, both including deployment, minting, and transfer as the three main stages, but there are differences in some details.

Token Name Length: BRC20 initially only supported 4-character lengths, later expanded to 5, while KRC20 directly supports lengths of 4 to 6 characters.
Minting Method: BRC20 only supports full minting mode, where all tokens are generated through minting operations, valid as long as they don't exceed the supply limit. KRC20 also supports pre-minting mode, allowing allocation of a certain number of tokens to specific addresses at deployment. These two modes provide KRC20 with greater flexibility in different application scenarios.
Fees: BRC20 has no special fee design for token deployment and minting, only requiring payment according to network rates. KRC20, however, sets additional fees, such as an extra fee of 1000 KAS for token deployment and 1 KAS for minting.

Technically, both KRC20 and BRC20 use JSON format to store data, but their data embedding methods differ. KRC20 embeds data into the Kaspa network through the "Pay-to-Script-Hash" (P2SH) mechanism, which effectively stores data while avoiding UTXO inflation, thus maintaining network scalability and persistence. In contrast, BRC20 tokens use the Taproot script path spending script of Bitcoin transactions to embed token data. This method may increase transaction complexity and potentially lead to more UTXO generation.

How to Choose KRC20 Token？

The main use case for KRC20 remains meme coins, so its selection criteria are highly similar to other public chains, especially Bitcoin inscriptions. When choosing KRC20 tokens, focusing on active community support and degree of decentralization is key.

The Kaspa community has its unique culture, and simply releasing the same version of popular meme coins from other public chains on Kaspa may not necessarily attract Kaspa community users. Among the current high market cap KRC20 tokens, there are almost no direct copies of coins from other chains. Therefore, when choosing KRC20 tokens, it's important to note whether there is active community support behind them.

Moreover, since KRC20 allows pre-mining, the degree of decentralization is also a factor to consider. If there's a large pre-mined portion, special attention should be paid to whether the team reserving tokens has enough sincerity and ability to develop the project; if pre-mining is minimal, then as a community-driven project, users should focus on the degree of token dispersion, such as whether there are enough minting times for more people to participate, and whether there are enough token-holding addresses.

In summary, users need to do thorough research when choosing tokens. Although the KRC20 team has limited token issuance by requiring a considerable amount of KAS to deploy tokens, there are still many tokens following trends and speculating, which need to be approached with caution.

Ecosystem Overview

Although KRC20 is still in its early stages, many excellent projects have emerged. CoinEx Research has selected the following projects to introduce the current KRC20 ecosystem landscape.

1. KRC20 Leading Projects

Nacho the Kat

Nacho is the highest market cap token on KRC20, with its brand image coming from the black cat pet of Kaspa's core developer Shai Wyborski. Its market cap reaches $50 million, with 16,000 holders and a Telegram community of 4,100 people, as well as a Discord community of 7,000 people.

As the current leading token of KRC20, Nacho not only has a large community but also a comprehensive project plan and roadmap. According to disclosures, Nacho has completed three processes: a. Token minting, b. Integration with KSPR Bot, where users can conduct quick transactions, c. Creation of a kat explorer, allowing users to view Nacho token-related information.

Currently, Nacho's plan is to successfully list on CEX, and the team is actively promoting this process. In the future, Nacho will also launch special features provided by KRC20 such as kat pool, governance, NFTs, etc., ultimately establishing an organization called K.A.T. to build a comprehensive Nacho project, pursuing a longer project life.

Source: Nacho Official

Kasper

Kasper is another outstanding KRC20 project currently, with its brand image derived from the cartoon ghost character of the same name as Kaspa. Its current market cap is $7.5 million, and in less than 20 days since launch, it has 7,200 holders, a Telegram community of 1,000 people, and a Discord community of 5,900 people.

Kasper also has a comprehensive product roadmap. Unlike Nacho, Kasper plans to launch the Kasper wallet, integrating some new features into the wallet. Kasper has also launched brand image-related clothing merchandise, and due to Kasper's ghost image, the team plans to launch a KASPER-themed event for Halloween, preparing special Halloween gifts for community members.

The subsequent plan is to further list on exchanges. After listing, promotional plans such as KASPER's global ambassador program, Copernic space collaboration, release of KASPER-themed games, and offline activities with the KASPER community will be launched.

2. KRC20 Tools

The following tools are essential for navigating the KRC20 ecosystem:

kas.fyi

Through kas.fyi, users can obtain comprehensive information about KRC20 tokens. Here's a brief introduction to the functions of kas.fyi:

First, users can view information on all KRC20 tokens deployed on Kaspa, whether minting is completed or not, and can also check their market cap, number of holders, minting progress, price, trading volume, deployment time, and other comprehensive information.

Second, it can also show the current network fees for Kaspa at different speeds, as well as the total number of KRC20 token deployments, total fees, and total transfers.

Finally, as KRC20 is a protocol for KASPA, kas.fyi also allows viewing of a large amount of data from the KASPA blockchain network, such as current hash rate, KAS token market data (price, market cap, etc.), time until the next halving, post-halving output, and mining cost calculator.

KSPR BOT

KSPR Bot is a convenient entry point to the Kasplex protocol, allowing users to easily deploy, mint, and transfer KRC20 tokens. Designed for beginners and developers alike, it's very easy to use even without any technical or blockchain background.

Using KSPR Bot, you can batch mint KRC20 tokens, and it's currently the only solution that allows direct interaction with the Kasplex protocol from a mobile phone. This all-in-one tool requires no additional software or wallet, making it the most convenient choice in the KRC20 ecosystem.

Open the Telegram bot and follow simple instructions to easily mint, deploy, and transfer KRC20 tokens without any prior knowledge or additional software. In terms of security, KSPR Bot uses industry-standard encryption to ensure transaction and private key security, and data is never stored on KSPR Bot's servers.

Currently, KSPR Bot has 27,000 monthly active users. Users wanting to try the KRC20 ecosystem should not miss this.

Chainge

The general voice of the Kaspa community indicates a need for a decentralized exchange (DEX) to support the growing KRC20 ecosystem. As a cross-chain DEX aggregator with over $1 billion in trading volume and high liquidity, Chainge is about to launch a dedicated DEX service. The Chainge DEX service will run on Kaspa, with liquidity pools hosted on KRC20, and LP tokens will also be native Kaspa tokens. The upcoming Chainge DEX service offers several key advantages:

Flexibility: Users will be able to swap any amount of KRC20 tokens without being limited by complete order fulfillment, enabling more seamless trading. Simplicity: KRC20 tokens (e.g., NACHO and KASPER) can be exchanged directly without using $KAS as an intermediary. Additional Trading Pairs: By introducing $CUSDT trading pairs, Chainge DEX will bring external trading volume from other chains into Kaspa, and alleviate sell pressure on $KAS by offering KRC20/CUSDT pairs.

However, KRC20 tokens traded on Chainge need to meet certain standards:

a. Size of the liquidity pool (slippage guarantee)

b. Number of token holders (volume guarantee)

c. Number of wallets providing liquidity (LP balance guarantee)

d. Community consensus (rug pull guarantee)

Source :Chainge official Twitter

In addition to providing DEX trading, Chainge will also release APIs for developers to integrate KRC20 DEX services. Chainge will also work to integrate and aggregate all future KRC20 DEXs and new plugin wallets.

With Chainge's strong support, KRC20's development has gained significant momentum, reaching a milestone. This represents an influx of more liquidity and developers into the KRC20 ecosystem, injecting new vitality.

In less than a month since its mainnet launch, KRC20 has already achieved certain results. Having established a user base and reputation, the future development space for KRC20 is exciting to imagine.

Summary

Since the launch of KRC20, the Kaspa network's activity has significantly increased, especially in the MEME coin sector, with multiple projects emerging. This growth not only demonstrates KRC20's positive role in driving network development but has also substantially increased miner income, further promoting the prosperity of the KASPA ecosystem. With the launch of DEXs and support from CEXs, KRC20 tokens are expected to gain more market attention. The support from these platforms not only provides broader trading channels for KRC20 but also enhances its liquidity and market acceptance.

At the same time, as more innovative applications are implemented, KRC20 will become an important component of the Kaspa ecosystem. Its diverse application scenarios and flexible token management mechanisms have attracted an increasing number of developers and users, laying a solid foundation for Kaspa's future development.

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