The cryptocurrency space is about to witness the emergence of a new Bitcoin-native digital commodity protocol that is expected to have a lasting impact. Developed by Casey Rodamor, the (Runes) protocol has generated great anticipation in the crypto community.
However, decentralized finance (DeFi) researcher and market expert DeFi Ignas warned investors not to be driven by the fear of missing out (FOMO) ahead of the protocol’s launch on Friday, and to consider several bearish factors first.
Rising BTC transaction fees and NFT-like trading mechanisms
In a recent social media post on X (formerly Twitter), DeFi Ignas pointed out several reasons for caution at this time.
The researcher highlighted the current enthusiasm surrounding the market for former Rune tokens. Tokens like Runestone, RSIC, and PUPS are experiencing price surges with promises of airdropping new Rune tokens to holders.
However, DeFi Ignas likened the market enthusiasm to the non-fungible token (NFT) craze and warned that such enthusiasm could soon cool down. In addition, the researcher said that the increase in Bitcoin transaction fees could pose a challenge to small traders, which could lead to disillusionment.
DeFi Ignas further noted that the Runes protocol may not initially revolutionize the trading experience of BRC20 tokens due to its underlying trading mechanism and user interface being similar to NFTs.
The researcher expressed doubts about the Runes protocol’s ability to provide a superior exchange mechanism to BRC20 tokens. In addition, a large number of Runes tokens are expected to flood the market, which may dilute traders’ attention and reduce the inflow of funds per token.
DeFi Ignas highlighted the uniqueness of Rune 0 (UNCOMMON•GOODS), which can be minted for free over four years but is limited to once per transaction, suggesting that this may not be a simple and straightforward investment opportunity.
Is Runes Protocol Ready to Go Beyond Meme Coin Status?
Regarding utility, DeFi Ignas expects Runes tokens to initially be traded as meme coins like BRC20 tokens. If these tokens are unable to sustain their rapid price increases, resulting in losses for investors, the initial excitement around their new features could fade.
Nonetheless, the researcher remains optimistic about the long-term prospects of the Runes Protocol, predicting that real opportunities may emerge once the initial hype cools down after the protocol launch.
DeFi Ignas explained that speculative narratives tend to emerge in waves, with the first wave driven by hype, usually stemming from technological innovation or meme potential.
By comparing it to past examples like Friend tech, ERC404, and Telegram bots, the researcher suggested that meme tokens often experience short-lived success. Meanwhile, narratives rooted in technological advancement are more sustainable after the hype.
The first wave was triggered by the Ordinals protocol launched by Casey Rodamor in December 2022, followed by a successive surge in late 2023. The current fourth wave is represented by the Runes protocol, and DeFi Ignas believes it will continue and trigger multiple waves in the future.
Ultimately, while short-term bearish factors warrant caution, experts believe that the Runes Protocol has significant long-term potential. As the protocol launches, market participants are advised to evaluate its impact beyond the initial hype and consider the technological advancement and unification it aims to bring to the Bitcoin DeFi industry.#符文协议 #Runes