Why Is BRC-420 Rising Against the Tide Amid a Market-Wide Pullback in the Bitcoin Ecosystem?
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Why Is BRC-420 Rising Against the Tide Amid a Market-Wide Pullback in the Bitcoin Ecosystem?
Initially in September, the mint cost of Blue Box, the largest asset by market cap under BRC-420, was as low as around $1. However, at the time of writing, its floor price has reached nearly $25,000.
Navigating Web3 tides with focused insightsBy Jaleel, BlockBeats
Edited by Jack, BlockBeats
Over the past few weeks, as Bitcoin has declined, the inscription market appears to have entered another minor "lull," with classic assets like ORDI and SATS experiencing varying degrees of price drops. This month, ORDI fell 21% and SATS dropped 34%. Fortunately, recent news of OKX listing several protocols has reinvigorated some related inscription assets, leading to noticeable price increases.
Recently, a widely circulated chart shared within the community showing the performance of Bitcoin-related assets on January 24 clearly demonstrated how BRC-420 assets rose逆势 during a broad downturn across the inscription ecosystem.
Image source: @zad1103
The BRC-420 protocol was developed by the Bitmap Tech team (formerly the RCSV team), enabling recursive composition of multiple inscriptions to create complex digital assets such as gaming items, animations, effects, or game modules. BRC-420 also integrates usage rights and royalties, giving inscription holders the ability to grant usage permissions and set pricing.
Back in September, the mint cost for Blue Box—the largest asset under BRC-420—was as low as around $1. However, at the time of writing, its floor price has surged to nearly $25,000. The sheer number is already astonishing, but when compared against Bitcoin's flagship inscription asset ORDI, the growth becomes even more striking. Back then, minting one ORDI (comprising 1,000 tokens) cost between $2 and $3; today, with each ORDI priced at $60, that same bundle is worth $60,000—an increase exceeding 20,000x. While ORDI took nearly 10 months to achieve this, Blue Box accomplished it in just 4–5 months.
Notably, on December 26, Recursiverse announced it would rebrand as Bitmap Tech, unveiling four core business lines. At that point, Bitmap Tech’s total market capitalization had already surpassed $500 million.
Then, on January 19, Bitmap Tech (formerly Recursiverse) officially announced the launch of Merlin Chain, a Bitcoin Layer 2 network built upon native Bitcoin Layer 1 assets, protocols, and products. Merlin bridges multiple Bitcoin L1-native assets to Layer 2.
Riding the Wave of Bitcoin Layer 2
Riding the momentum of Bitcoin Layer 2 may well be a key reason behind BRC-420’s逆势 growth.
From the beginning of last year until now, the Bitcoin ecosystem has gone through several downturns despite nearly a year of strong activity, and now appears to be at a critical juncture. There is an undeniable market consensus: the Bitcoin ecosystem will remain the biggest focal point for a long time to come. As a result, investors are actively seeking new opportunities within the BTC ecosystem, and many users both domestically and internationally believe the next breakout will center on Bitcoin Layer 2.
Thus, recently, we’ve seen a clear surge in Bitcoin Layer 2 projects, with over thirty different Bitcoin L2 initiatives now active in the market. Clearly, whether among project teams or the broader community, Bitcoin Layer 2 solutions are gaining increasing popularity.
Notably, Bitmap Tech’s four main businesses include: the metaverse platform Bitmap.Game, the BRC-420 asset protocol and marketplace, the Recursiverse recursive application matrix—and most importantly, the Bitcoin Layer 2 network Merlin Chain, currently in testnet phase.
Merlin Chain’s Bitcoin Layer 2 solution integrates key components including a ZK-Rollup network, decentralized oracle networks, and on-chain fraud proofs, focusing specifically on empowering native Bitcoin L1 assets, protocols, and applications.
Image source: Merlin Chain
Merlin Chain’s specific approach to Bitcoin Layer 2 can be further understood through its official strategic partnerships.
Bitmap Tech has formally announced three new strategic partners: Particle Network and its newly launched BTC Connect solution, providing account abstraction services for BTC; Lumoz, offering ZKEVM design and infrastructure for BTC Layer 2; and iZUMi Finance, delivering high-efficiency decentralized trading and liquidity solutions for BTC Layer 2.
Among them, iZUMi previously introduced its DaaS service and partnered with the Bitcoin Layer 2 network Merlin Chain to launch Merlin Swap. Operated by an independent team, Merlin Swap receives official support from Merlin Chain and technical backing from izUMi Finance. It aims to deliver a centralized-exchange-like experience within the DeFi ecosystem by leveraging the stability of the Bitcoin network and the interoperability of Merlin EVM. Moreover, 80% of Merlin Swap’s total token supply will be fairly distributed to traders and liquidity providers to incentivize ecosystem growth, with additional airdrop rewards planned for users of both izUMi Finance and the Merlin Chain.
Although Merlin Chain initially stated its testnet would not feature incentive programs, NanFeng, CEO of partner Lumoz (formerly Opside), revealed during a BlockBeats-hosted Space event on January 29 that Merlin Chain is expected to officially launch as early as February this year, accompanied by incentive campaigns.
Additionally, Merlin Chain adopts Cobo’s MPC solution to ensure funds remain non-custodial, enhancing security. Cobo has long specialized in secure private key management and associated risk controls, earning significant influence in the industry since its inception.
Bitcoin L1 interactions present certain barriers to entry for new users, limiting inflows of fresh capital. Merlin aims to make Layer 2 the user’s “starting point,” where users can deposit either BTC or other tokens like USDT, USDC, ETH, or BNB and immediately begin experiencing native BTC-based applications.
L1 Assets, Recursive Matrix
On composability and recursion, the DeFi Summer was itself a form of expression—DeFi building blocks like DEXs, aggregators, and lending protocols triggered a Lego-like innovation wave. In the NFT space, Loot stands out as a pivotal moment, widely regarded as having ushered in a new era of NFT composability.
Loot proper, also known as OG Loot, launched on August 25, 2021, with a total of 8,000 units, 7,779 of which are currently in circulation. Each NFT represents a loot bag containing eight equipment items, described line by line: one item each for feet, hands, chest, neck, and head, plus one ring, belt, and weapon. Due to Loot’s open-ended nature, it invites vast creative potential. Some community members have already used it to build simple generative artworks.
In BRC-420, asset composability refers to the ability to combine multiple components or elements when creating digital assets, resulting in new, more complex creations. This feature allows creators and users to innovate and customize atop existing assets, increasing flexibility and diversity. Composability enables easier creation of tailored assets meeting specific needs and functions—especially valuable in fields like gaming, art, and the metaverse.
Image source: Merlin Chain
This approach not only enhances creativity and engagement but also unlocks richer, more diverse possibilities within the digital asset ecosystem. Furthermore, BRC-420 significantly reduces pressure on block size limits.
Regarding the composability of Bitcoin assets, Casey has openly expressed strong interest. He has also shared observations and thoughts about inscriptions on the Bitcoin chain via social media.
On December 26 last year, Casey noticed many inscriptions starting with "/content/" followed by another inscription ID. He questioned who was behind these actions and recalled prior mentions of the issue. Initially unable to find information about such "/content/ID" inscriptions in the BRC-420 spec, he eventually discovered relevant details after prompts from community members and KOL Bitli. This discovery inspired Casey to innovate the delegate field, which he later incorporated into the latest Ordinals upgrade—now live and already applied in DERP’s airdrop.
Community-First Internet Product Strategy
Unlike traditional finance, community plays an indispensable role in crypto—often serving as the driving force behind project development. This is especially true for the Bitcoin ecosystem, where having an active, highly engaged community is crucial.
As KOL Wizard @0xcryptowizard noted, the BRC-420 team deeply understands the essence of internet products. They not only grasp market demands but also precisely identify the keys to building a powerful community. Within the Bitcoin ecosystem, a community-first strategy has become a major factor in project success.
For Bitcoin projects, community is the most valuable asset. Fairly launched assets mostly belong to community members, making the Bitcoin ecosystem naturally suited for a “community-first” approach—growing the project by growing the community. Especially in the early stages of protocols and projects, the team’s actions decisively shape the entire ecosystem. Therefore, understanding and effectively harnessing this community-driven power is essential for the success of any Bitcoin-related initiative.
When Meme Culture Meets BRC-420
Whether public chains, protocols, or ecosystems, meme culture offers a fast track to mainstream attention and is one of the quickest ways to build community. For BRC-420, “This Song about NFT” serves exactly this purpose—commonly referred to in the community as the “Musk Music Box.”
Elon Musk originally posted this NFT-themed song on social media, sparking widespread discussion and interest. On December 27, 2023, Elon Musk shared the music video on Twitter, claiming “NFTs on ETH aren’t on-chain.” The community then inscribed the video onto the blockchain with a total supply of 42,069. BRC-420 leveraged the power of this meme.
This community-created meme video embodies pure grassroots energy, bringing Bitmap Tech closer to its user base.
0xWizard discussed the dynamic relationship between BRC-420 assets and Merlin Chain in a tweet, describing a flywheel effect. He pointed out that fair launches of tokens on Merlin Chain attract substantial total value locked (TVL) and user interaction, thereby boosting ecosystem valuation. He also referenced how the Music Box—the first meme asset—was repriced, and how its conversion into $tsan via image-to-token swaps influenced mining activity on Merlin Chain, locking liquidity and attracting new capital flows.
Strong Backing, Accelerated Growth
With funding secured, BRC-420 has gained significant momentum. Key investors in Bitmap Tech include ABCDE Labs and OKX Ventures, both influential players in the cryptocurrency space.
OKX Ventures needs little introduction. As the Bitcoin ecosystem continues heating up, OKX has emerged as one of the biggest winners thanks to its seamless wallet product, and its venture arm is equally active.
Meanwhile, ABCDE Labs has conducted deep research into zero-knowledge (ZK) technology. On June 27 last year, it co-hosted a two-month-long ZK Hacker Camp with Starkware, 0xParc, BeWater, and others, aiming to advance ZK technology development and adoption.
ABCDE Labs and OKX Ventures are also longtime collaborators in the investment world. They jointly led funding rounds for the decentralized hackathon platform BeWater and have co-invested in multiple Bitcoin ecosystem projects, including the Bitcoin staking protocol Babylon, Bitcoin DeFi project bitSmiley, and Bitcoin Layer 2 BSquared Network. Clearly, they maintain active collaboration in advancing the Bitcoin ecosystem.
Internet Mindset
The Blue Box is the first official asset issued by the BRC-420 team, Bitmap Tech. By price performance and community consensus alike, it serves as the core pillar powering the entire ecosystem, with a total supply of 10,000.
Reports suggest Blue Box holders will receive dividends from future ecosystem revenues, periodic airdrops from partner projects, and whitelist access to collaborative initiatives within the Bitcoin ecosystem.
Additionally, “image-to-token swaps” represent a compelling narrative. According to community sources, using Bitmap as an example, the system allows 1 Bitmap to be exchanged for 1,000 $WMAP tokens—and vice versa—with bidirectional liquidity maintaining a stable peg and negligible conversion costs. A similar mechanism applies to the Blue Box, where each box can be swapped for 2,100 corresponding tokens. Notably, the Music Box also uses a comparable image-to-token swap model, linked to the $TSAN token.
BlockBeats has verified that while such information hasn’t been officially confirmed, it circulates widely within and beyond the community. Particularly within Blue Box holder groups, these alpha leaks are highly active—making these communities feel somewhat like knowledge-sharing groups with premium informational value.
"There are two Blue Box holder groups, and founder Jeff is very active in them—many alpha insights and roadmap updates are casually revealed," a core community member told BlockBeats.
This recalls Xiaomi’s use of internet thinking in the smartphone industry. Shortly after filing its IPO in 2018, Lei Jun emphasized in an open letter titled “Who Is Xiaomi, and What Are We Fighting For?” that “Xiaomi is not just a hardware company, but an internet company driven by innovation.”
Finding Mi fans, cultivating Mi fans, and engaging Mi fans ultimately turned this fanbase into Xiaomi’s top strategic marketing tool. Leveraging this internet mindset, Xiaomi transcended traditional marketing models, using the internet’s timeless connectivity and low-cost efficiency to directly engage users. Through managing online communities, Xiaomi established hyper-connected relationships with its users, forming a massive “Mi Fan” base and creating the distinctive Xiaomi model—a fresh perspective for the traditional smartphone industry.
Now, as Merlin Chain prepares to launch, Bitmap Tech has already cultivated a thriving asset ecosystem—including both official and purely community-driven projects. More importantly, it has amassed a large user base and traffic. This means that in building the Bitcoin Layer 2 network Merlin Chain, Bitmap Tech holds a significant advantage over competitors: an established loyal user base from day one.
And in the liquidity-driven world of crypto, greater liquidity translates directly into greater survival and success potential.
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