CashTokens

CashTokens are a new type of tokens introduced to the Bitcoin Cash platform through a network upgrade that took place on May 15, 2023. They allow developers to easily create and deploy both fungible and non-fungible tokens (NFTs) on the platform. This upgrade also included enhancements to the overall capabilities of the Bitcoin Cash network, such as reducing transaction sizes to increase transaction throughput, and improving smart contract functionality to support use cases like derivatives trading, crowdfunding, and recurring payments​.

CashTokens are ideologically similar to BEP-20 tokens on BNB Chain or ERC-20 tokens on Ethereum. They enable anyone to deploy tokens that represent practically any type of asset. Despite being distinct from the native Bitcoin Cash gas unit (BCH), CashTokens can still be transferred on the blockchain via transactions. Transactions involving CashTokens are considered just as secure as non-token transactions and do not require the use of additional indexing software​​.

The new token format supports a wide range of business applications on the Bitcoin Cash blockchain, including identity tokens and decentralized exchanges. The Bitcoin Cash blockchain can support CashTokens as of block #792773, and since the upgrade, more than 25,000 CashToken NFTs and over 1,100 fungible tokens (FTs) have been created. CashTokens can be either fungible or non-fungible, making them suitable for a broad spectrum of use cases:

• Fungible CashTokens: Used in cases where asset or data fungibility is necessary, such as on-chain stocks, bonds, stablecoins, loyalty points, voting shares, and general-admission tickets.
• Non-fungible CashTokens: Used in cases where token uniqueness and indivisibility are necessary, such as tokenized works of art, identity tokens, role tokens, and options positions​​.

CashTokens have a specific address format associated with them, and not all Bitcoin Cash wallets are compatible with CashToken-based transactions. The CashToken feature is opt-in, meaning wallets can accept BCH without supporting CashTokens. Currently, there is no marketplace for CashTokens, but users can mint tokens directly within a CashToken-compatible wallet. Some of the wallets planning to support CashTokens include Electron Cash, Guarda, and Cashual Wallet​.

A key advantage of CashTokens over Ethereum-based NFTs like ERC-721 tokens is their greater gas efficiency. The upgrade adds four new fields to the transaction output data model, known as token fields, which include the token category, non-fungible token capability, non-fungible token commitment, and fungible token amount. Users can send both fungible tokens and non-fungible tokens with a single output using the UTXO model without calling any resource-heavy smart contract functions, keeping transaction size down​.

Platforms like CashScript can now be used to create UTXO smart contracts on Bitcoin Cash or develop their own CashTokens. The Cash Improvement Proposal (CHIP) specification for the CashToken upgrade includes details for a Metadata Registry, which allows CashToken issuers to publish information easily about their token​.

A number of projects are already building CashTokens, and the new upgrade has been implemented as a hard fork, introducing CashTokens to the Bitcoin Cash platform. The upgrade is supported by several popular centralized exchanges (CEXs), including Binance and KuCoin.