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Binance announced that it will cease support for Bitcoin Ordinals, effectively discontinuing trades, deposits, and related airdrops of Bitcoin NFTs on its platform by mid-April of 2024. This move comes despite the huge amount of engagement and transaction fees generated by over 64 million inscriptions since the Ordinals protocol's introduction. Despite their popularity, challenges like increased transaction sizes and potential blockchain bloat have presented some issues. Meanwhile, Franklin Templeton is still very bullish on Ordinals. The firm recently pointed out the innovation and activity spurred by Bitcoin Ordinals and other crypto ventures. Coinbase also seems to like Ordinals as it is expanding its offerings with perpetual futures for ORDI and WLD tokens.
Binance Ends Bitcoin Ordinal Support
Binance announced that it is scaling back its support for Bitcoin non fungible tokens (NFTs) only a year after introducing them to its marketplace. The exchange revealed in a blog post from Apr. 4 that it will stop supporting trades and deposits of Bitcoin Ordinals on Apr. 18
Binance also advised users to withdraw their Bitcoin NFTs via the Bitcoin network before May 18, 2024, to avoid any potential loss of their digital assets. Furthermore, the marketplace will also discontinue any airdrops, benefits, and utilities associated with Bitcoin NFTs after Apr. 10, 2024. Binance specifically mentioned that users of Runestone NFT, who are eligible for an airdrop, should withdraw their tokens by Apr. 10 to secure any associated tokens, utilities, and benefits thereafter.
The enthusiasm that greeted the introduction of Bitcoin Ordinals is reflected in the fact that the network has seen more than 64 million inscriptions to date and has generated more than $423 million in transaction fees. This indicates an impressive engagement with the protocol, despite the challenges it poses to the Bitcoin network's capacity and efficiency.
What are Bitcoin Ordinals?
Bitcoin Ordinals, also referred to as Bitcoin NFTs, are an innovative addition to the Bitcoin ecosystem, introducing the concept of NFTs directly on the Bitcoin blockchain. This innovative approach was developed by Casey Rodarmor and made its debut on the Bitcoin mainnet in January of 2023.
Through the Ordinals protocol, digital information—ranging from simple texts and images to complex videos and multimedia assets—can be inscribed onto individual satoshis, which are the smallest unit of Bitcoin. This process effectively transforms these satoshis into unique digital collectibles, merging the worlds of cryptocurrency and digital art within the secure and immutable framework of the Bitcoin ledger.
At its core, the Ordinals project utilizes the technological advancements provided by the Bitcoin network, specifically the Taproot upgrade and Segregated Witness (SegWit). Taproot enhances Bitcoin's efficiency and privacy by making transactions more uniform, while SegWit addresses transaction malleability and boosts the block capacity, thereby enabling the Bitcoin network to handle additional data. This foundational technology allows for the "inscription" of digital assets onto the blockchain, which is a big departure from Bitcoin's original design as a purely financial system to one that can also support unique, digital collectibles.
There are many advantages of integrating Ordinals into the Bitcoin blockchain. Primarily, it inherits the robust security features of Bitcoin, which is powered by a Proof of Work consensus mechanism. This mechanism has been battle-tested for over a decade, demonstrating resilience against numerous attacks and vulnerabilities, making Ordinals one of the most secure platforms for NFT creation and ownership.
Additionally, the immutable nature of Bitcoin's blockchain ensures that once an Ordinal is inscribed, it is permanently recorded, and is resistant to censorship and manipulation. This immutability creates confidence in the provenance and authenticity of digital assets, which is a crucial aspect for collectors and creators alike. Furthermore, the concept of scarcity is intrinsically supported through Ordinals, as each inscribed asset is tied to a unique satoshi, enabling the creation of genuinely rare and valuable digital artifacts.
Despite these advantages, the implementation of Bitcoin Ordinals still presents some challenges that need careful consideration. The process of inscribing large amounts of data onto the blockchain can lead to increased transaction sizes, potentially resulting in higher fees as miners prioritize transactions based on the economic incentives provided. This could marginalize individual creators and people with limited resources, hampering broader adoption. Additionally, the continuous addition of data-intensive inscriptions risks causing blockchain bloat. This could then worsen already existing scalability issues in the Bitcoin network. It could also mean that ongoing protocol upgrades might be necessary to manage the increased storage and bandwidth requirements.
Franklin Templeton on Bitcoin NFTs
Despite Binance’s decision and the possible challenges presented by Bitcoin Ordinals, Franklin Templeton still seems to believe in the technology. The asset manager recently shared insights into the flourishing sector of Bitcoin-based NFTs with its investors and pointed out the big role Bitcoin Ordinals play when it comes to spurring innovation in the Bitcoin ecosystem. The firm specifically drew attention to the revival of activity on Bitcoin over the past year, most likely due to Ordinals, along with the introduction of new fungible token standards like BRC-20 and Runes, the development of Bitcoin-based layer-2 networks, and the emergence of Bitcoin decentralized finance (DeFi) primitives.
The asset manager also observed an acceleration in activities within the Bitcoin NFT space, and pointed out the increased trading volume and market dominance of Bitcoin Ordinals since December of 2023, when it surpassed Ethereum in trading volume. Collections like NodeMonkes, Runestone, Bitcoin Puppets, Ordinal Maxi Biz, and Bitmap are starting to lead in terms of trading volume and market capitalization in the NFT space.
Despite its optimistic view on Ordinals, Franklin Templeton also warned investors about the potential for value loss in these assets, stressing that they come without bank guarantees or insurance from the Federal Deposit Insurance Corporation. However, the firm reminded its investors that all investments carry risks.
In a broader embrace of the crypto space, Franklin Templeton also delved into memecoins in a recent investor note, recognizing their potential for quick profits despite having "no inherent value." Franklin Templeton has been exploring various crypto niches and even moved into the exchange-traded fund (ETF) market, launching a spot Bitcoin ETF in the United States earlier this year and filing for a spot Ether ETF.
Coinbase Launches Perpetual Futures for ORDI and WLD
Coinbase also seems optimistic about Ordinals. The exchange is set to expand its offerings to institutional clients by introducing perpetual futures for BRC-20 token Ordinals (ORDI) and Worldcoin (WLD) starting Apr. 11. This announcement was made in a post on X on Apr. 4.
ORDI and WLD tokens have seen remarkable trading activity and price movements over the past few months. The ORDI token, although not officially connected to the Bitcoin Ordinals team, is inspired by the Ordinals protocol and has experienced a meteoric rise in value, soaring 1,640% from $5 in November last year to a peak of $87 in March. CoinMarketCap data indicates that ORDI is currently worth $59.07.
On the other hand, Worldcoin, associated with the digital identity project offering cryptocurrency in exchange for biometric data, has also attracted a lot of interest from investors, with its price increasing from $2.20 in February to $11.70 in March. At press time, WLD was trading hands at $6.61.
The introduction of perpetual futures for ORDI and WLD adds to a growing list of such contracts on Coinbase's international platform targeted at institutional investors. Perpetual futures are derivative contracts that allow speculation on the future price of an asset without an expiration date. Before this, Coinbase International also added futures for Wormhole's native W token and announced plans to include futures for Litecoin and Dogecoin.
Coinbase has invoked the self-certification method to launch these futures contracts, a process that allows them to initiate trading based on adherence to regulatory guidelines specified by the Commodity Futures Trading Commission.
Doginals
Interestingly, the Dogecoin blockchain community recently completed its own "Runestone" airdrop that was inspired by a similar event in the Bitcoin Ordinals ecosystem last month. Dubbed the "Doge Runestone" Doginals, a term coined for Dogecoin's iteration of Ordinals, this event saw a distribution of 30,272 tokens to holders of at least one Doginal from specific collections. The airdrop finished on Apr. 2, and the Doge Runestones are now trading at a floor price of about 184 DOGE.
This initiative basically mirrors the Bitcoin Ordinals-based Runestone airdrop, which airdropped more than 112,000 Runestones to early adopters. Dogecoin, originally a fork of a Bitcoin fork, introduced its Doginals protocol in February of last year, just a month after Bitcoin Ordinals were launched.
Despite the innovative Doge Runestone airdrop, DOGE's price ended up dipping. CoinMarketCap indicates that the meme coin’s value slipped by more than 5% over the past day of trading. As a result, DOGE is worth about $0.1713 at press time.
