Ordinals' non-fungible tokens (NFT), which triggered a 50% rally in Stacks Network's STX token earlier this week, have the potential to push STX into a billion-dollar token, Matrixport said in a research report on Wednesday.

Ordinals is a new protocol that allows NFTs to be stored on the Bitcoin blockchain. STX is the native token of the Stacks Network, a layer 2 blockchain that leverages the security of the bitcoin blockchain to settle transactions.

As Ordinals are minted directly onto the blockchain, they are “considered to be digital artifacts due to their permanence and immutability on the distributed ledger,” as opposed to traditional NFTs which can be altered by smart contract developers, wrote Markus Thielen, head of research.

Matrixport notes that the idea of Bitcoin NFTs is not a new concept and has been developed by protocols such as Counterparty and Stacks. The recent hype around Ordinals NFTs led to a 50% rally in STX earlier this week.

The coming together of NFTs and the Bitcoin network brings more security, transparency and traceability. It has opened up more use cases and reignited interest around these tokens, the report said. Last week the number of newly minted Ordinal NFTs on the Bitcoin blockchain surpassed 100,000, it added.

“Stack’s ability to leverage the Bitcoin blockchain’s security for settlement of transactions positions the network well for developing Bitcoin decentralized finance (DeFi),” the note said. DeFi is an umbrella term for a variety of financial applications carried out on a blockchain.

The full potential of the Stacks Network is starting to get recognized which could lead to further gains in the STX token, the note added.

Read more: The Ordinals Protocol Has Caused a Resurgence in Bitcoin Development