Over the past month, DOG coin has steadily climbed from its bottom price to a new high, quickly becoming a hot spot in the market. This rise has not only triggered a general appreciation of rune-related assets, but also promoted the recovery of activity in the entire track. Investors have begun to pay attention to this emerging field, looking for potential huge investment opportunities. But behind this craze, people can't help but wonder: When will this field usher in its real breakthrough? In early 2023, the BRC-20 standard based on the Ordinals protocol triggered a craze for building and speculating around BTC assets. This wave not only promoted the attention and capital injection into Bitcoin's second-layer network and decentralized financial (DeFi) infrastructure, but also had a positive impact on the long-term development of the Bitcoin ecosystem. Despite this, the popularity of the BRC-20 standard has also brought about problems of congestion and data redundancy in the Bitcoin network. In order to solve these problems, Casey Rodarmor, the creator of the Ordinals protocol, published a blog in September 2023, proposing the Runes protocol, a fungible token protocol based on BTC's UTXO model, called the "Runes Protocol."
The Runes protocol was officially launched on April 20, 2023, the day of the Bitcoin halving. In the early days, as the first batch of runes were minted, the gas fee of the BTC network soared to more than 1,000 sats, and the market reached an unprecedented level of enthusiasm. However, the market's focus soon shifted from runes to other areas. In the past month, as DOG has steadily risen from the bottom to a new high, rune-related assets have experienced another wave of increases and have regained market attention.
How runes work
The Runes protocol issues and tracks tokens by leveraging Bitcoin's native UTXO model, a design that is both native and decentralized. In addition, the balance of runes is directly held by UTXO, and a UTXO can contain any number of runes, effectively avoiding the generation of useless UTXOs, thereby improving the utilization efficiency of on-chain space.
In Bitcoin transactions, Runes protocol data is stored in the OP_RETURN field. This field allows up to 80 bytes of data to be stored in the transaction output, marked with OP_RETURN, and subsequent data pushes will be specified and assigned to UTXO. Valid protocol messages are marked by data pushes starting with a capital letter "R", and any invalid message will result in the destruction of the rune.
Comparison of Rune and BRC-20
Compared to BRC-20, the Runes protocol has several significant advantages:
Runes is designed for token substitution, based on the native structure of Bitcoin, does not rely on off-chain data, and only requires one casting process, which is simple and efficient. In contrast, BRC-20 is based on the Ordinals protocol suitable for building non-fungible tokens, relies on off-chain indexes, and usually requires two casting processes, which is more complicated.
The Runes protocol stores data in an 80-byte OP_RETURN field, while BRC-20 uses witness data, which can take up to 4MB. Runes-built tokens are therefore more compatible, take up less space, and help reduce the pressure of blockchain expansion.
The Runes protocol is based on the UTXO model, perfectly integrated with Bitcoin's native architecture, and inherits its high security. In the future, its scalability will be stronger, and it will be seamlessly compatible with Bitcoin's second-layer solutions such as the Lightning Network, and is expected to play a greater role in the Bitcoin ecosystem.
In early 2023, the BRC-20 standard based on the Ordinals protocol set off a wave of construction and speculation around BTC assets. The rise of this emerging asset type has attracted a lot of attention and funds, especially the meme craze on the SOL and Base chains further proves the importance of this type of asset in attracting funds. However, the Runes protocol, as a fungible token standard designed specifically for BTC, provides an environment more suitable for speculative activities.
The advantage of the Runes protocol lies in the simplicity, efficiency and excellent compatibility of its asset issuance method. The protocol is based on Bitcoin's native UTXO architecture and does not rely on any third party or off-chain data, thereby reducing the possibility of network congestion and providing the potential for seamless docking with future upgrades and ecological solutions with the BTC network (such as Layer 2, bridging technology, etc.).
In addition, the Runes Protocol solves Bitcoin’s security budget problem by facilitating rune transactions, providing the network with a new source of transaction fee revenue. This is critical to maintaining the long-term security and sustainability of the network.
Comparison and future prospects of Rune with other crypto assets
Before the launch of the Runes Protocol, the first batch of Rune Stone NFTs were preheated through airdrops, and then officially launched on the Bitcoin halving day, and the first batch of Rune Stone holders were airdropped, completely free of charge and supported by community funds. The Rune Stone airdrop attracted more than 110,000 active participants, creating favorable conditions for rapid launch and dissemination.
In terms of price, the price of Rune Stone increased during the market preheating period, and then fell after the Rune DOG airdrop, while DOG showed an upward trend after market pricing. In the future, with the release of more runes and market dynamics, the value of Rune Stone is expected to be re-increased.
In terms of trading volume, since DOG was launched, its trading volume has been leading among runes, mainly concentrated in major exchanges such as Gate, and its daily trading volume has reached more than 70 million US dollars, far exceeding other runes.
In terms of chip structure, although DOG has a large number of holders in the rune, the chips are relatively dispersed, which also reflects its wide market acceptance and strong market consensus. Although it has not yet landed on the top centralized exchanges, its performance in the trading market and the stability of the number of holders show its potential as a leading rune.
In general, the Runes protocol has demonstrated its unique value in the field of cryptocurrency and its huge potential for future development through its innovative token issuance method and deep integration with the BTC ecosystem.
As the rune craze led by DOG continues to heat up, the market's expectations for this field are also growing steadily. Although there may be some fluctuations and adjustments in the short term, in the long run, the development prospects of the rune field are undoubtedly very promising. Investors should remain calm at this stage and conduct in-depth analysis of various projects in this field to ensure that they can stand in a favorable position during the potential outbreak in the future. In this market full of opportunities and challenges, only those investors who adhere to scientific analysis and maintain firm beliefs can truly take advantage of the wealth growth opportunities brought by the rune craze.
