Author: dt, DODO Research
The Runes protocol, which has been long awaited by retail investors, has finally been launched along with the BTC halving. Except for No. 0 which is reserved, everyone can register to issue runes. It immediately overwhelmed the Bitcoin blockchain network when it was first launched, and the transaction fee once exceeded 1,000 sats/vB. According to the Dune Analytics dashboard shared by blockchain research company Crypto Koryo, since the launch of Runes on April 20, it has processed more than 2.38 million transactions, accounting for 68% of the total Bitcoin transactions.
Today Dr.DODO will introduce to you what runes are, what innovations they have, and which inscription items are worth noting.
What are Runes?
Casey Rodarmor, founder of Ordinals, believes that the current equivalent token solutions issued on the Bitcoin network (BRC20, Taproot Assets, etc.) all have their own shortcomings, and thus a token standard was designed with the idea of creating a homogeneous token protocol based on UTXO.
Key Features
UTXO-based: Runes balance is held by UTXO, and each UTXO can contain any number of Runes.
Transactions and Protocol Information: Outputs that contain specific scripts are considered part of the Protocol Information. These scripts specify how Runes are transferred and distributed.
Flexibility: The transfer of Runes is defined by interpreting the data push in the transaction, allowing for flexible allocation of Runes to different outputs.
Issuance: If there is a second data push in the protocol message, it will be considered an issuance transaction, allowing the creation of new Runes.
Simplicity and decentralization: The Runes protocol is as simple as possible, does not rely on off-chain data, has no native token, and fits into Bitcoin’s UTXO model.
Symbol Assignment: Runes can have symbols associated with them, but the protocol does not try to avoid symbol squatting, to keep things simple.
Innovation, strengths and weaknesses
Advantage:
Based on UTXO, the model Rune protocol adopts Bitcoin's native UTXO model. Each UTXO can contain any number of any Rune tokens, which solves the problem of Brc20 junk UTXO expansion and allows Rune to be more naturally integrated into the Bitcoin system.
No reliance on off-chain data. All information of the Rune protocol is included in on-chain transactions. There is no need to rely on off-chain data, which reduces complexity and improves user experience.
Native BTC tokens. Unlike sidechains or BTC L2 solutions that require native tokens to pay for fees, the Rune protocol does not require any additional tokens to operate, simplifying the usage process.
Disadvantages:
There is no anti-squatting mechanism. In order to keep it simple, Rune does not have a mechanism to prevent the preemptive registration of token symbols, which may cause some ideal symbols to be registered prematurely. The current solution is that when Runes are first launched, the length of all token names starts from 13 characters and above. After that, the minimum length of the name is reduced by one letter approximately every four months until the next halving event, when Runes containing only a single character can be created (a total of 26).
Long font size runes are not conducive to dissemination and listing on exchanges
Allowing project parties to reserve funds has been questioned in terms of fair distribution
How to cast and trade runes
Many tool websites that support Brc20 casting also support Runes casting. Among them, GeniiData, Runestore and Luminex are the most popular because they can monitor popular inscriptions in casting at the same time, but you must also pay attention to the relevant handling fees. In addition to the web front end, there are also TG robots such as BTCBot, which are more convenient and fast to cast runes.
Casting:
Unisat - https://unisat.io//runes/inscribe
OKX Web3 - https://www.okx.com/zh-hant/web3/marketplace/runes
GeniiData - https://geniidata.com/ordinals/inscribe/runes
Luminex - https://luminex.io/runes/mint
Runestore - https://runestore.io/
BTCBot - btcbot.pro
On the other hand, in the trading market, the mainstream MagicEden, Unisat and OKX Web3 are still the largest. From the user experience point of view, ME is the best. The simple interface supports multiple order scanning at the same time and the transaction fee is the lowest. The previous Brc20 leading market OKX Web3 did not perform well because it did not support order scanning and could only interact with its own OKX Web Wallet.
market place:
MagicEden - https://magiceden.io/runes
Unisat - https://unisat.io/runes/market
OKX Web3 - https://www.okx.com/zh-hant/web3/marketplace/runes
Runes worth noting
The current mainstream of runes is still based on Meme narratives. The top ten runes are the most popular. In addition, cat and dog themes and words mentioned by the founder Casey, such as (WANKO•MANKO•RUNES, ANARCHO•CATBUS), are all within the scope of hype.
Source: https://docs.bsquared.network/architecture
Judging from the 24-hour trading data of MagicEden, the rune market with the largest trading volume, the current leading rune is the inscription DOG•GO•TO•THE•MOON launched by KOL Leonidas’ Runestone project. This project is 100% reserved and airdropped to Runestone holders without open minting. Since there are many Runestone holders and the community has been operating for several months, it is currently the target with the strongest consensus.
The second most traded inscription, RSIC•GENESIS•RUNE, was airdropped by the NFT project RSIC METAPROTOCOL based on previous mining activities. It is one of the very few inscriptions that is not pure Memecoin and has a gameplay mechanism. The project is currently planning to carry out the second phase of mining activities.
The third place in trading volume, LOBO•THE•WOLF•PUP, is also 100% reserved for airdrops to Runestone and Rune Doors holders. It was launched by KOL @_BuoyantCapital and has attracted high attention in the community because the airdrop was just issued the day before.
SATOSHI•NAKAMOTO, which ranks fourth in trading volume, is the first rune to be successfully listed on an exchange. Before DOG•GO•TO•THE•MOON issued the airdrop, it was the rune with the highest market value and the most holders. Since it is the rune with the least reservation (20%) among the top ten runes, it was the most popular and was listed on the Gate Exchange within two days of the rune protocol’s launch. However, its leading position has been surpassed by DOG•GO•TO•THE•MOON and its popularity is no longer there. No project party has stood up to express the low community consensus.
The No. 1 rune Z•Z•Z•Z•Z•FEHU•Z•Z•Z•Z•Z has a 99% reserved share. As many people speculated that the share would be permanently locked, a wave of people rushed to mint it in the past two days. However, the project team stated on Twitter that it does not recommend users to mint it despite the expensive transaction fees, and said that 99% of the share will be given to everyone in the future.
In addition, the two Meme Puppet and Wizard communities promoted by the well-known KOL Ansem, runes No. 13 PUPS•WORLD•PEACE and No. 17 MAGIC•INTERNET•MONEY, are 100% reserved by the project party and will be airdropped to BRC20 and Ordinals NFT holders in the future. They are also worthy of everyone's continued attention and tracking.
Author's opinion
A few days before the runes were launched, I also participated in the casting of several rune projects. From the experience, rune casting is quite easy due to the considerable infrastructure of Brc20 inscriptions, and it is not as unchanging as the early inscriptions. However, it also raises the question of what the difference is between runes. BRC20 has been established as a narrative for asset issuance on BTC, and BRC20 is quite successful at present. There is no difference in the gameplay of runes for retail investors.
But at the same time, for project parties that want to issue assets on BTC, issuing runes is indeed better than BRC20 in terms of experience. Runes are a more mature asset issuance protocol and can perfectly serve as a substitute for BRC20. However, for Memecoin consensus, community consensus cannot be established overnight. Therefore, it is unrealistic for the Runes Memecoin that suddenly emerged to compete with Ordi, Sats, etc. For the author, more attention will be paid to runes launched by project parties that already have mature products or communities rather than runes cast simply because of the name that attracts Fomo.