# What's RGB Assets?

### 1. What Is RGB20?

RGB20 is the **fungible token standard within the RGB protocol**, similar to ERC20 on Ethereum.\
It allows users to issue, transfer, and manage tokens on **top of Bitcoin**, using RGB’s **client-side validation** model.

Every token is anchored to a Bitcoin UTXO, while contract data and state remain off-chain with the users. This ensures:

* **Security inherited from Bitcoin**
* **Reduced on-chain data load**
* **Greater privacy and scalability**

***

### 2. Practical Value of RGB20 Assets

* **Bitcoin-native**: Every RGB20 token is bound to a Bitcoin UTXO, making them **true Bitcoin-native tokens**.
* **Lightning-enabled**: RGB20 tokens can move through the Lightning Network, enabling **fast, low-fee transfers**, unlike Ordinals and Runes which are on-chain only.
* **Flexible asset issuance**:
  * Stablecoins (e.g., Tether’s experiment with USDT on RGB)
  * Project tokens / community coins
  * Gaming or application credits
  * DeFi liquidity assets

***

### 3. RGB20 vs Ordinals / Runes

| Feature         | **RGB20**                                        | **Ordinals**                      | **Runes**                                     |
| --------------- | ------------------------------------------------ | --------------------------------- | --------------------------------------------- |
| **Nature**      | Fungible token standard (like ERC20)             | Non-fungible inscriptions on sats | Fungible tokens (like BRC20, but more native) |
| **Storage**     | Client-side validation + UTXO commitments        | Directly inscribed on-chain       | UTXO-based, simplified structure              |
| **Transfer**    | **Lightning-enabled**, efficient                 | On-chain only, high fees          | On-chain only, medium-high fees               |
| **Use Cases**   | Stablecoins, project tokens, DeFi                | NFTs, collectibles                | Meme tokens, speculative issuance             |
| **Privacy**     | High (off-chain data, on-chain commitments only) | Low (fully public on-chain)       | Medium (UTXO visible)                         |
| **Design Goal** | Build Bitcoin’s token finance layer              | Native NFT art and collectibles   | Mass fungible token issuance                  |

***

### 4. Summary

* **RGB20 is Bitcoin’s ERC20**: a standard for fungible tokens natively secured by Bitcoin.
* **Its key advantage is Lightning compatibility**, giving it real potential for payments and finance compared to purely on-chain models like Ordinals or Runes.
* **Future value**: RGB20 could be the backbone of **Bitcoin DeFi and stablecoin ecosystems**.


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