The BRC-20 token standard quickly gained traction after its launch in March 2023, allowing users to create fungible tokens native to Bitcoin, however its popularity and architectural features led to network congestion. To address this issue, the Runes protocol was developed (by Casey Rodarmor, the mastermind behind the innovative Ordinals protocol).
The highly anticipated launch of Bitcoin Runes will coincide with the fourth Bitcoin halving, which occurs today! While the halving itself may be old news to seasoned crypto veterans, the launch of runes adds an extra level of excitement to the mix.
Rodarmor himself stressed that the timing of the release of Bitcoin Runes was more than just a coincidence, it was a strategic move to maximize the protocol’s impact on the Bitcoin ecosystem. With its user-friendly interface and powerful architecture, Bitcoin Runes is expected to usher in a new era of token creation on the blockchain.
What does Bitcoin Rune do? In short, the Runes protocol uses Bitcoin's UTXO model and OP-RETURN opcode to simplify the creation and management of tokens. All nodes in the Bitcoin network verify transactions by ensuring that UTXO is not spent twice, maintaining the integrity and security of the blockchain.
Runes uses minimal blockchain space, avoiding the UTXO proliferation common to BRC-20 tokens, thereby increasing transaction speed. At the same time, the BRC-20 creation process may generate unnecessary UTXOs, causing inefficiencies and increasing network congestion.
The Runes protocol has been activated, and there will be a bunch of rune stones, serial numbers, etc. airdrops in the future. If you haven’t seen the previously published article about "Runes Rune Craze is Coming, How to Layout?", then you are too late, but this does not mean that you are completely late. Since runes are essentially memes, they become outdated quite quickly. What really makes sense is to look at the infrastructure built around runes.
Opportunities exist for projects building infrastructure around Runes:
Magic Eden: is the largest NFT marketplace on the Solana blockchain, has successfully expanded into the Bitcoin ecosystem, and currently holds the largest market share. It allows traders to buy, sell, mint, and manage tokens, and includes a thriving secondary market;
Unisat: is a DEX for Bitcoin and a wallet of the same name for holding and trading BTC, BRC-20, Runes, and domains;
ALEX: is the main DeFi hub within Stacks, with a DEX that includes an order book, launchpad, and multiple bridges for BRC-20 and Runes token trading;
Sovryn: is the leading DeFi platform on RSK, with $SOV tokens and $DLLR stablecoins. Recently, the team announced the expansion to Build on Bob Chain to provide rune trading;
Luminex: is an Xverse-powered launchpad that allows etching of runes and splitting of UTXOs to etch multiple runes using the same wallet;
Liquidium: is a lending protocol that provides lending services with ordinals and runes as collateral;
RuniGun: is a Telegram bot for etching, casting and managing runes;
Although there were many participants when the Runes protocol was launched, the market was crowded, and the gas fees were ridiculously high, which prevented many people from becoming the first batch of people to mint runes, there is a high probability that there will be great opportunities to pay attention to and participate in the projects that build the rune infrastructure selected above.
Previous selections:
"It's the first anniversary of the Inscription Track, but the Runes have quietly rolled up to the sky!"
"Runes is coming, how to plan?"
Note: All content represents the author's personal views only, is not investment advice, and should not be construed in any way as tax, accounting, legal, business, financial or regulatory advice. Before making any investment decision, you should seek independent legal and financial advice, including advice on tax consequences.
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