ARC20
The token issuance model based on PoW mining and a 1:1 SATS collateral mechanism
Last updated
The token issuance model based on PoW mining and a 1:1 SATS collateral mechanism
Last updated
PoW mining, which stands for Proof of Work Mining, is a consensus mechanism first introduced and widely adopted by Bitcoin. It involves using computational power to solve complex mathematical problems, thereby earning new digital currency rewards. ARC20 tokens utilize the PoW mechanism to calculate and obtain the minting rights for ARC20 tokens.
The 1:1 SATS collateral mechanism means for every ARC20 token obtained through PoW, a fixed amount is collateralized with SATS on a 1:1 basis. This is different from the flexible collateral mechanism of Ordinals, where each Ordinal requires a minimum of 330 sats in storage collateral, and not exceeding 1000 sats.
The community refers to ARC20 as jewelry crafted from gold, with its advantage being value preservation. Users who mint directly incur only the transaction fee as the maximum loss. However, the 1:1 SATS collateral results in high capital occupation.
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