What is ARC-20?

ARC-20 is the fungible token model inside Atomicals. Its rule is short:

One ARC-20 unit is one satoshi in a Bitcoin output that a validator recognises as coloured.

That single sentence decides everything else. Supply is measured in satoshis. A transfer is a question about which outputs receive how much value. Value that cannot be placed is destroyed.

One unit is one satoshi. An ARC-20 balance is not a number stored somewhere. It is the satoshi value of the outputs a validator recognises as coloured for that token. An output worth 700 satoshis that a validator colours for a ticker carries exactly 700 units. Spending it spends the units. Splitting it splits the units, subject to the allocation rules.

One unit is one satoshi

An ARC-20 balance is not a number stored somewhere. It is the satoshi value of the outputs a validator recognises as coloured for that token. An output worth 700 satoshis that a validator colours for a ticker carries exactly 700 units. Spending it spends the units. Splitting it splits the units, subject to the allocation rules.

Why this is not an account balance

Account transfer against ARC-20 allocation. An account transfer subtracts a number from one row and adds it to another, and an invalid transfer simply fails. An ARC-20 transfer spends whole coloured outputs and assigns their value to new outputs in order. The Bitcoin transaction confirms either way, so an unwanted result is not reported as a failure. It is reported as a different allocation, which can include a burn.

Account transfer against ARC-20 allocation

An account transfer subtracts a number from one row and adds it to another, and an invalid transfer simply fails. An ARC-20 transfer spends whole coloured outputs and assigns their value to new outputs in order. The Bitcoin transaction confirms either way, so an unwanted result is not reported as a failure. It is reported as a different allocation, which can include a burn.

In an account model a transfer subtracts from one row and adds to another, and the transaction either succeeds or fails. In ARC-20 the transaction succeeds on Bitcoin either way. What changes is where the coloured value lands.

Question	Account model	ARC-20
Where is the balance?	A row in a ledger	Spread across your unspent outputs
What is a transfer?	Debit and credit	Assigning input value to outputs in order
Can value vanish?	No	Yes. Unplaceable value is burned
Who decides the result?	The contract	The validator revision your indexer runs
Does confirmation mean success?	Yes	No. Confirmation and allocation are separate answers

The failure mode to understand first

If the next eligible output is larger than the coloured value still to place, that value is not carried forward. It is burned. This is not an error state on Bitcoin: the transaction confirms normally. Read burns before moving anything.

The three ways units come into existence

Mode	Operation	Shape
Direct issuance	ft	The entire supply lands in output zero of one transaction
Fixed decentralised	dft then dmt	A deployment sets the rules, then claimants mint a fixed amount each
Perpetual decentralised	dft with perpetual parameters	Activation gated, with progressing Bitwork and an optional global cap

See direct issuance, fixed DFT, and perpetual DFT.

What a ticker does and does not mean

A ticker is a globally allocated name. Winning it means the Atomicals rules resolved a candidate into a verified winner. It does not mean:

• the project is who it says it is;
• the metadata is accurate;
• the image belongs to the minter;
• anyone stands behind the supply.

Always store and display the resolved Atomical ID next to any ticker. See tickers and candidates.

Decimals do not create fractions

decimals is presentation metadata. It changes how a wallet formats a number on screen. It never creates sub-satoshi units. Native ARC-20 quantities are integers, always. See metadata and decimals.

• Allocation, step by step

  Exactly how a validator places coloured value into outputs.

• Try it

  Model a transaction and see the burns before you build one.