From CryptoWiki

On the 20th of January, a developer by the name of Casey introduced the concept of the Ordinals Protocol. What he’d managed to do is find a way to inscribe any type of file on-chain to a single Satoshi, i.e. the smallest denomination of a Bitcoin, and track it throughout the Bitcoin network. This inscription tracks the ownership of the file, essentially creating a Bitcoin native onchain NFT.

This concept was taken a step further by a pseudo-anonymous account known as domo, who identified a method through which it was possible to create fungible tokens on the Ordinals Protocol. Essentially, one inscribes JSON onto Bitcoin (Satoshis) via the Ordinals Protocol to "Deploy" a BRC-20 by providing a ticker, a maximum number of tokens, and a limit per mint. Users are then able to mint these tokens for free, yes that’s right… all BRC-20 tokens were minted for free with no pre-mine.

BRC-20 tokens can only be transferred once a token project meets its maximum number of tokens minted. Transfers too are made possible by inscription, in which a user will inscribe a transfer JSON of however many tokens they desire to send. As it currently stands, there have been over 14k BRC-20 tokens deployed, with a total market capitalisation of over $580m. The most notable being the native token of the Ordinals Protocol itself, $ORDI, as well as meme coins $PEPE and $MEME. This token standard has been trending up only in its dominance of daily Bitcoin transaction count since the 20th of April, peaking at 65.3% on the 7th of May. The result is that Bitcoin recently saw two-year highs in network fees as a result of congestion, with Binance even opting to temporarily halt withdrawals on the Bitcoin network as a result.