The Bitcoin network has been in the news for the past several months with new tokenization standards, and we have heard various news in this regard.
Dogecoin did not sit idle and published its own standard. It named it DRC-20 in imitation of Ethereum’s ERC-20 and Bitcoin’s BRC-20.
Litecoin also introduced LTC-20 as its own standard in order not to fall behind. These standards have a relatively similar mechanism and are in their experimental stages, and it is still not possible to comment with certainty about their efficiency.
In this article, we explain what the two DRC-20 and LTC-20 standards are and what features each one has.
Let’s dive in and explore together:
- Key facts of DRC-20 and LTC-20 standards
- What is the DRC-20 token standard?
- What is the mechanism of DRC-20?
- Advantages and Disadvantages of DRC-20 Tokens
- How to mint DRC-20 token?
- What is the LTC-20 standard?
- How does the LTC-20 standard work?
- Advantages and disadvantages of LTC-20
- How to mint LTC-20 tokens?
- Frequently Asked Questions
Key facts of DRC-20 and LTC-20 standards
- The DRC-20 and LTC-20 standards are used to create fungible tokens on the Dogecoin and Litecoin networks, respectively.
- With the help of these two standards, users can add data on Dodge and Litecoin tokens.
- These two standards are experimental.
- To mint token with DRC-20 standard, you need to install and activate DPalWallet.
- For LTC-20 mint tokens, you need to install Litescribe Wallet, which is a Chrome browser extension.
What is the DRC-20 token standard?
DRC-20 token standard was introduced on May 9, 2023 (May 19, 1402). We said that this standard has the same structure that we saw before in BRC-20 coins. That is, it is a method to make fungible or replaceable tokens.
In the DogeCoin blockchain, the smallest Doge units are known as ELON. Every 100 million ELON is equal to one DOGE coin. This new standard allows us to add information and data to these small units.
The DRC-20 standard was created with the aim of solving the shortcomings of BRC-20 (low speed and high cost). The better speed of transactions as well as the lower cost are two factors that both cover the interests of investors and attract the attention of fans and lovers of tokenization standards.
Here, like the Ordinals protocol, we are dealing with something called Inscription, which allows the registration of data types on the Dogecoin blockchain.
With the help of this standard, exchangeable tokens can be created without the need for side chains or smart contracts. The Doginals protocol is a copy of the Ordinals protocol implemented on the Dogecoin network.
This standard allows the creation of decentralized applications. Some people believe with great optimism that this will pave the way for the creation of DeFi services on the Dogecoin blockchain.
Although such an event is ideal and a bit far-fetched, we can keep an eye on it.
What is the mechanism of DRC-20?
To get familiar with the structure of the DRC-20 standard, we must refer to the Doginals protocol, which is the foundation for token standards.
This protocol is a scheme for numbering ELON and each ELON in this structure has its own serial number. In this way, each small unit of Dogecoin can be identified and unique.
This mechanism is similar to the process we saw in Bitcoin Ordinals.
Advantages and Disadvantages of DRC-20 Tokens
If we want to have a better view of the DRC-20 standard, examining its advantages and disadvantages can help us.
Advantages of DRC-20 standard
- Creating opportunities for early adopters and users
- Low minting costs
- The reception of these tokens was so great that according to the Coin Desk report, the daily transactions of Dogecoin increased significantly and broke its historical ceiling.
Disadvantages of the DRC-20 standard
- Limited structure due to being new
- Restrictions on marketplace
- Validation concerns
- Being experimental
In this chart, the blue line represents Bitcoin transactions and the red line represents Dogecoin transactions. You can see the significant increase in Dogecoin transactions at the time of the launch of these tokens.
How to mint DRC-20 token?
For this, there is a simple path in front of you. We emphasize here that this standard is experimental and you should know that you are fully responsible for your assets.
First, install DPalWallet via this link. This wallet can now be installed as a browser extension. After that you need to deposit some Dogecoin to your wallet.
In the next step, you can mint the DRC-20 token. Once here, click on the wallet settings on the right side of the plugin and select Doginals.
Then, in the next step, click on the Mint Doginals option.
After this, you will have an image as shown below. You can write any text in the Text box and by paying the fee and clicking the Inscribe button, you can mint the data on the Dogecoin blockchain.
You can also choose in the DRC20 header that you intend to deploy, mint or transfer the token and fill in the fields of each section according to your needs.
What is the LTC-20 standard?
Now that we are familiar with the exclusive standard of Dogecoin, we will take a look at the LTC-20 standard of Litecoin.
This standard was also introduced as LTC-20 following the existing versions. This standard has a supply of 84 million coins.
Like DRC-20, LTC-20 is an experimental tokenization standard for fungible tokens and paves the way for tokenization on the Litecoin network. LTC-20 tokens engrave metadata (token information) on the units of each token native to the network.
Currently, these tokens have no special use and can only have benefits for their main network.
NFT tokens on the way to the Litecoin network. The LTC-20 standard was introduced inspired by Bitcoin’s cardinals
How does the LTC-20 standard work?
LTC-20 tokens are created using Litecoin’s Ordinals protocol. Before this standard, it was not possible to create exchangeable tokens on the Litecoin network, but now it is possible to mint, deploy and transfer these tokens with the help of their functions.
Of course, services such as wallets or browser extensions have made the work easy, and without needing any knowledge about the work of these functions, you can mint the desired files and information on Litecoin units with just a few clicks.
Advantages and disadvantages of LTC-20
This token standard has its own advantages, among which the following can be mentioned:
- These tokens can represent various assets such as digital currencies or securities.
- LTC-20 tokens can help create decentralized applications.
- This token creation standard can help the growth and prosperity of the Litecoin ecosystem.
The risks involved with this standard are not dissimilar to the risks we described earlier with DRC-20. These items can be named as follows:
- Uncertainty from a legislative perspective
- Security vulnerabilities
- Lack of widespread acceptance by users
- Technical complications
- Problems and issues related to scalability
- The volatility of tokens and the possibility of pumping and dumping and the risks associated with it
- Lack of liquidity
More can be added to this list.
How to mint LTC-20 tokens?
The LTC-20 standard documentation website has introduced a service for data engraving (Inscription), to use which you must enter the Litescribe Inscribe website.
You can upload your file or text in this section. To complete the first steps, you need a Litecoin address. You can use Electrum Litecoin wallet to get this address.
Now visit the litescribe.io website again and click on the Inscribe menu.
In the image below, you can see that in the Files menu, you can upload files with specified formats.
Then enter the address in the Receiving LTC Address box.
Next, click on the Submit & Pay invoice button.
Doing so requires you to pay the Mint fee to complete the Inscribe operation.
After this, the engraved data will be deposited directly to the address you entered.
But if you want to inscribe a text instead of a file, select the Text tab.
If you want only one inscription, select the Single option. If you want to do this in bulk, use the Bulk option and enter your text in each line.
Finally, click the Upload button.
By doing this, on the next page you will see a summary of what you have done.
Then you have to pay the fee again to finish the data engraving operation.
Here, the third header (LTC-20) is the same as the previous two headers. Just specify what you intend to do. Do you want to mint, deploy or transfer tokens?
Again, repeat the previous steps until the job is finished.
We remind you that this is a test standard and you are responsible for the cost you pay for the various operations.
Frequently Asked Questions
What is the DRC-20 standard?
An experimental standard is the creation of fungible tokens on the Dogecoin network, according to which data can be engraved on each Elon (the smallest unit of Dogecoin).
What is the LTC-20 standard?
It is a standard similar to Bitcoin’s BRC-20, which allows adding different data on Litecoin units.
We are now at a time when different networks are trying to create their own token standards. From Bitcoin to Dogecoin and Litecoin, they have launched experimental versions of their tokenization standards.
The DRC-20 standard is for the Dogecoin network and the LTC-20 standard is for the Litecoin network. Both of the mentioned standards are used to make fungible tokens and can be used to inscribe or engrave information such as photos or text on Dogecoin or Litecoin units.
What do you think about these new standards in general? Do we need such standards at all? What do you see as the advantage of this work? What is its disadvantage in your opinion?
We have to wait and see when the fever of these standards subsides and we can judge them with a clearer vision.