Original author: Jaleel Jialiu, BlockBeats
RUNES wants to be the "Las Vegas" of the Bitcoin network, but BRC 20 does not want to be "Atlantic City".
When talking about several famous casinos in the world, many people's first reaction is "Las Vegas" or "Macau". However, "Atlantic City", located in southeastern New Jersey, the first gambling city in the history of the United States, has long been in decline and forgotten, even though "Atlantic City" once made a net profit of 3 billion US dollars a year.
Image source: Internet
At the Ordinals Asia event at Hong Kong Bitcoin Week two weeks ago, Casey Rodarmor, founder of Ordinals and RUNES Protocol, said directly and frankly in his speech: "If Ordinals and Runes are a casino that is more transparent, more decentralized, and has a lower house advantage than Las Vegas, all Degens can be happy here, and I think this is also very good." Related reading: "Ordinals founder's speech in Hong Kong: StarWorld Casino, why not?"
The RUNES ecosystem has been online for more than a month, and its current market value has not only reached Casey's initial target of US$1 billion, but in recent days, the ecosystem's assets have also ushered in a new round of overall increases.
On May 29, DOG•GO•TO•THE•MOON rose 38.83% in 24 hours, setting a record high; RSIC•GENESIS•RUNE rose 14.15% in 24 hours; PUPS•WORLD•PEACE rose 31% in 24 hours; CATS•IN•THE•SATS rose 56% in 24 hours.
Yesterday’s RUNES ecosystem growth, data source: Geniidata
Casey honestly admitted that RUNES he built is a casino and hopes that users can get the best experience here. "For each of us, it is honest and practical to look at the construction of Ordinals, inscriptions and runes from the perspective of building social, gambling and entertainment products. We don't need to hide anything, so that your users can experience the fairest and most interesting products."
As RUNES prices rose across the board, many community friends also remembered the first MEME casino in the Bitcoin ecosystem. Has BRC 20, like Atlantic City, fallen into decline?
How big of a threat is RUNES to BRC 20?
Before Runes was officially launched, many community friends seemed to have sensed that the relationship between RUNES and BRC 20 was somewhat competitive. People often joked that Ordinals was an ecosystem that was always “fighting” with each other. The imminent launch of Runes also meant that this conflict of ideas was about to turn into a real war, a war between new casinos and old casinos.
Related reading: "Rune" is coming, is a war between Ordinals about to begin?
The personal experience of "gamblers"
For "gamblers", the biggest difference and advantage of RUNES compared to BRC 20 is that the "casino" trading experience is better.
BRC 20 requires two transactions, engraving and transfer, to complete a transfer, while RUNES omits the engraving step and only requires one transaction to complete it.
“The selling process of BRC 20 is that I need to engrave a transfer inscription first, and after the chain is confirmed, I need to transfer the transfer inscription out, which requires another chain confirmation. This requires two gas and two waits, which is very costly in terms of time and money. It will also cause a lot more 546 sats in the wallet to be occupied, and these garbage will always exist.” Bitcoin ecosystem observer and player 0x Sea explained in detail to BlockBeats.
This means that BRC 20 leaves more transaction records on the blockchain, and each transfer adds additional transactions, which not only increases costs but also increases the burden on the network. In contrast, RUNES has significantly lower transaction fees and is more efficient.
From a cost perspective, the RUNES protocol can reduce the total cost of minting transactions by up to 60%. In an interview, 0x Sea commented: "RUNES does improve some of the problems of BRC 20. For example, when dealing with small UTXO inflation, BRC 20 requires additional inscribe operations, while RUNES does not because it is based on the UTXO mechanism. Although BRC 20 has also improved on this point, RUNES is more obvious in the deployment of new currencies."
This is also what Casey has always been dissatisfied with BRC 20 - the generation of a large number of "junk" UTXOs. This is also the reason why Casey released the "Rune" concept. Runes are native to Bitcoin's unspent transaction output (UTXO) model, which minimizes the generation of "junk" UTXOs, thereby achieving more responsible UTXO management and a smaller on-chain footprint.
“I really don’t like this aspect of BRC 20. Transactions require so much gas. When the gas fee is high, the cost of minting, listing, and selling is really high,” an anonymous community member said in an exchange with BlockBeats. “Because of this, when you sell it, you basically have to triple or quadruple your investment to get your money back. If there is no good support and development background behind this token, then minting is a loss.”
RUNE's trading experience is smoother and seamless. The anonymous community member said frankly: "In comparison, BRC 20's multiple transactions and complicated steps are cumbersome and time-consuming. Sometimes I even think that this has a lot to do with Domo's personality or way of doing things. His progress in promoting BRC 20 is really slow. Unlike Casey, everyone submits the code directly on GitHub, and Casey merges it directly if he thinks it's OK."
However, some community members believe that Domo's cautious and steady progress is reasonable: "To ensure the security and stability of the system to a certain extent, a slow pace is acceptable."
BRC 20 Small and medium-sized assets are struggling to survive
A netizen who had passed by Atlantic City said that there was no sign of prosperity in the city. Not to mention luxury cars, there were very few pedestrians passing by, just like an empty city. Although BRC 20 is not an empty city like Atlantic City, there are rumors that "RUNES will kill BRC 20 one day."
Image source: Internet
"For existing leading BRC 20 currencies such as Ordi and Sats, it will not have much impact, but for small and medium-sized BRC 20 currencies, RUNES will definitely have a greater impact on them." 0x Sea told BlockBeats.
0x Sea further explained: The threat of RUNES to BRC 20 can be seen from multiple levels. For BRC 20, Ordi has been listed on the largest trading platforms OKX and Binance, and their liquidity is mainly concentrated in CEX, so they will not be threatened too much by RUNES. But for the newly issued currencies of BRC 20, I think it will have a great impact, especially those small and medium-sized currencies with a market value of only a few million US dollars. "
This is also confirmed by the data. As of the time of writing, Ordi has risen from the bottom of around $36 to $49, an increase of 36%, and Sats has also risen by 14% this week.
Looking at the trading volume, the trading volume of Ordi/USDT on Binance reached 208 million USD in the past 24 hours, and the trading volume of Sats/USDT reached 97.97 million USD in the past 24 hours, but the trading volume on the chain was only 130,000 USD and 38,000 USD respectively. Obviously, more trading volumes of Ordi and Sats are on centralized trading platforms.
Data source: Geniidata
According to Geniidata data, on May 31, only wzrd, core, Pi, Piin, Ordi and PUPS had a 24-hour trading volume of more than $100,000 in BRC 20. As for RUNES, according to Geniidata data on May 31, 17 tokens had a 24-hour trading volume of $100,000.
Data source: Geniidata
“If you originally planned to buy new shares on BRC 20, or the project wanted to issue a new coin, under the current circumstances, people might choose RUNES. This is because RUNES has gained more on-chain infrastructure support in a very short period of time, such as support from wallets and minting platforms. In the short term, RUNES's traffic exposure far exceeds that of BRC 20,” 0x Sea told BlockBeats.
In an exchange with BlockBeats, the Bitcoin ecosystem lending protocol Shell Finance team revealed that they will use the NFT Fair Launch on the Ordinals protocol to complete the construction of the community core and the cold start of the product and liquidity. Regarding the view that "BRC 20 will be completely replaced by RUNES", the Shell Finance team believes that this is not entirely true. "This view is only partially correct. RUNES assets do have an impact on BRC 20, but the main impact is on BRC 20's MEME coins."
If you don’t want to be Atlantic City’s BRC 20, how can you defend yourself?
During the booming gambling industry in Atlantic City, theaters, cinemas, concert halls, dance halls, gift shops, etc. that served the gambling industry also opened one after another and developed rapidly. At the same time, because it is a seaside tourist destination and a famous health resort city, with a world-famous seaside boardwalk built along the coast, after the decline of the gambling business, Atlantic City almost transformed into a tourist city with travel as its main business.
Now, facing the direct attack from RUNES and the attack from various other Bitcoin FT protocols, BRC 20's "casino" business is also undergoing "industrial upgrading and migration" as a defense.
5-word inscription and "self-forging" mechanism
“How should BRC 20 deal with this? In fact, I think many people in the BRC 20 ecosystem have already realized this problem, so they released an improved upgraded version one to two weeks before the official release of RUNES. This update introduced a five-character ticker, allowing project parties to self-mint. This is entirely for the consideration of project parties, allowing them to choose to self-mint tokens and then decide how to distribute them to other users.” 0x Sea analyzed.
Just before the launch of RUNES, the latest update of BRC 20 not only supports the 5-character ticker, but also introduces a "self-issuance" mechanism, that is, the project party can deploy and complete the token issuance by itself, and also supports the burning mechanism.
These updates have enabled BRC 20 to complete a certain degree of industrial upgrading, which not only facilitates the centralized issuance of projects, but also stimulates market performance through deflation. Whether or not the founder Domo intended to do so, it means that the two will have fierce competition.
After the 5-character token was activated at block height 837090, the first batch of enthusiasts scrambled to deploy the five-character token and even raised the gas cost to thousands of dollars. More careful people found that a user who was keen on buying had engraved the inscription "I collect these tickers in the hope of donating them for free to interesting and hardworking individuals or teams who are constantly building in the Ordinals ecosystem" in his wallet address.
The Pizza that Unisat is currently airdropping is also one of the 5-character tickers that were snapped up at the time and was gifted to Unisat by a friend in the community.
The Shell Finance team said: "After upgrading to a five-character ticker, it means that BRC 20 has begun to shift from a MEME coin factory to DeFi systematic infrastructure and applications. RUNES mainly impacts the assets and traffic of four-character MEME coins, which I agree with because it does have a great impact. But for the Bifi scenario on Bitcoin, it is the end of the war of layer-one asset protocols. Whoever can attract more developers to build new applications based on asset protocols will have the last laugh. At present, BRC 20 has begun to get involved, AVM is advancing, and Runes has not yet started."
Is “industrial relocation” competitive?
Just like after "Atlantic City" was replaced by "Las Vegas", it began to actively or passively develop tourism.
After BRC 20 is no longer the first choice of "gamblers", the industry has also begun to actively or passively migrate from "Bitcoin casino" to DeFi infrastructure. "In the early days, we chose the synthetic stablecoin asset $BTCx issued on BRC 20 because Shell Finance needs a Swap protocol and service provider support. In contrast, BRC 20 has more mature infrastructure such as Unisat to help develop it." Shell Finance said.
“With the development of the Runes protocol, we can also see that some DEX infrastructure projects have begun to be built on Runes. Whether it is MagicEden launching the Runes Swap function or Runes DEX, they have begun to build infrastructure based on Runes. So we are now continuing to observe and consider whether we should switch to the Runes track to build Shell Finance.” Shell Finance told BlockBeats.
As Runes develops, if DeFi protocols also emerge in its ecosystem that support functions such as mortgage and asset management, then there will still be a certain amount of competitive pressure on BRC-20. In this way, BRC 20's "industry migration" does not have much long-term competitiveness and advantage.
In the long run, BRC 20 still faces several threats: Although RUNES is a standard at the Ordinals protocol level, its implementation itself does not rely on the Ordinals protocol. It is independent like Taproot Assets and RGB. The implementation of BRC 20 relies on the Ordinals protocol. In the long run, the development of BRC 20 appears passive.
Secondly, there will be more "interactivity" between RUNES and Ordinals protocols. For example, BLOB team co-founded one of the developers of Ordinals protocol and is currently developing recursive runes for "linkage" between RUNES and Ordinals? Related reading: "Recursive Runes" are coming?
"The RUNES protocol cannot be viewed and evaluated alone, it should be evaluated together with Ordinals, which is an important dimension to attract developers." 0x Sea said this. He agrees that the relationship between RUNES and Ordinals is like soy milk and fried dough sticks, just like the relationship between Ethereum's ERC 20 and ERC 721, which will form a good synergy, and the effect is definitely greater than the sum of its parts. "The interoperability between the RUNES and Ordinals protocols may achieve double the effect, but of course, the challenges faced by developers and projects are also doubled."
Fortunately, for BRC 20, the infrastructure development of RUNES is not yet fully sound, and the DeFi infrastructure is in a state of vacillation. The leading effect of RUNES has not yet fully emerged. Except for the DOG•GO•TO•THE•MOON of Runestone, there is no particularly clear leader on RUNES, unlike Ordi and Sats who have firmly sat on the "dragon throne".
How can old casinos survive in the face of new casinos? In this critical year, BRC 20 must give its own answer.
Thanks to: Interviewees 0x Sea, Shell Finance
