Author: Trustless Labs

1. The Controversy of Authenticity of Runes

1.1 Origin of Runes

The Runes protocol was proposed by Casey Rodarmor, the founder of the Ordinals protocol, in his blog.

Casey stated that although he was skeptical about creating alternative token protocols on the Bitcoin network, due to its popularity and the lack of signs of the trend receding, as well as the potential to bring significant transaction fee income to Bitcoin, attract developer attention, and user groups, he attempted to create a simpler and more efficient alternative token protocol. The protocol promises to optimize token operations in the Bitcoin ecosystem through a simplified UTXO model and an effective token transfer mechanism.

The Runes protocol supports token issuance, allowing the creation of any number of tokens, and setting human-readable symbols and decimal places. Its transmission mechanism is based on tuples of integer sequences, involving token IDs, output indexes, and allocation amounts.

1.2 "Fresh" Design of the Runes Protocol

Features of the Runes Protocol

• When registering, divisibility (equivalent to decimal), supply, symbol (only supports a single length of Unicode characters), and rune names can be specified.
• The name characters must be uppercase letters, with a variable length that gradually opens up shorter length runes for registration as the block height increases.
• Names cannot be repeated, with a unique number starting from 0 according to the deployment order, and a unique ID encoded according to the height and deployment order at the current height, for example, 173940/256 represents the 256th rune deployed at height 173940.
• Periods or dots can be added to the name as a display separator, which only affects the name display and does not affect registration. For example, if "CASEY•RUNES•EVERYTHING" is registered, "CASEYRUNES•EVERYTHING" or "CASEYRUNESEVERYTHING" cannot be registered.
• Distribution mechanism pending: According to the current code, all supply will be sent to the registrant's wallet address at the time of registration, and there may be changes in the future.

Advantages of Runes over the BRC-20 Protocol

• Based on the UTXO model: The Runes protocol adopts a UTXO-based system, which is more consistent with Bitcoin's native architecture. It avoids the need for off-chain data dependency and does not require native tokens, making the user experience smoother.
• Use of OP_RETURN for transfer: Runes' transfer is implemented through the OP_RETURN script, making token allocation and transfer more efficient.
• Issuance mechanism: Runes' issuance is defined through a specific message format, making the flow and distribution of tokens more transparent and clear.
• Higher efficiency: The Runes protocol addresses the issues of UTXO diffusion and inefficiency in the BRC-20 protocol. It simplifies the operation process, with registration and transfers requiring only one transaction, thereby improving overall efficiency.
• Reduced on-chain footprint: Runes aims to minimize its on-chain footprint, reducing the generation of bad UTXOs.
• Lightning Network compatibility: Runes is compatible with the Lightning Network, providing new use cases and possibilities for developers and users.
• Destruction mechanism: Runes contained in transactions with invalid protocol information will be destroyed.

1.3 Runes Imitation — Rune Alpha

Due to its theoretical orthodoxy and advancement, the Runes protocol has been highly anticipated by the Bitcoin community since its proposal. However, its slow development progress has also provided opportunities for imitations to capitalize on its concept and profit.

Runes Deployer by Ordinals Wallet

As early as the second day when Casey released the concept of the Runes protocol, Ordinals Wallet began the deployment of "Runes" in response to its popularity, while conducting comprehensive promotion in the community, social media, and media. Although Ordinals Wallet seized the first wave of traffic for the Runes concept, progress stagnated as the hype faded, and everything came to a halt.

Rune Alpha

On December 5th, the Bitcoin network's Rune project, Rune Alpha, was officially launched, with its mainnet issuing the first token, $COOK. According to the official Rune Alpha statement, they had technical exchanges with Casey, and Rune Alpha was built on the ord 0.11.1 foundation, written into the Ordinals repository.

Part of the Bitcoin community, eagerly anticipating the Runes protocol, mistakenly believed that this project was the Runes protocol proposed by Casey due to its highly consistent name. They rushed into Rune Alpha to participate in token minting amid the escalating market FOMO sentiment.

On December 6th, Casey tweeted, stating that all kinds of Runes-related protocols and services were unrelated to him personally, and that he would not trace and identify these imitations when the official Runes protocol goes live. Meanwhile, some users reported issues such as asset transfers and runes being used as gas burning during interactions. According to Rune Alpha's response, this was due to user mishandling leading to wallet problems, and "warnings have been issued to users in the Discord community."

Although Rune Alpha can no longer rely on the narrative of "orthodoxy" to continue its marketing, market FOMO and speculative sentiment still prevail. The unique feature of Rune Alpha's rune minting is "limited time, unlimited quantity": users can mint within 150 blocks between 819863 and 820013, with each minting allowing for 1000 tokens, and there is no total limit. According to dune billboard data, as of now (12.22 20:50), $COOK has been fully minted in the 150 blocks, with 199,153 minted and 10,481 holders.

Following the official launch of Casey's Runes protocol on the Bitcoin testnet signet, Rune Alpha quickly responded by deploying tokens on the signet and attempted to demonstrate through screen recording operations, data analysis, and other evidence that Rune Alpha can be recognized and indexed by the official Runes protocol of the new version ord 0.13.1. At the same time, Rune Alpha responded to the community's call and is actively building its Marketplace.

However, according to the current code, the official Runes protocol mainnet will start parsing at the block height of the Bitcoin halving and will only index tokens issued after the halving height and that comply with the Runes protocol standards.

2. Community Voices

Warm Embrace

1. Official Ordinals community Ordicord https://discord.com/invite/ordinals

• Since late September, discussions about Runes in the community have been on the rise.

  

• From November, there has been a lot of discussion in the community about the technical implementation of Runes and imitations. Users in the Ordinals ecosystem believe that Runes is an upgraded version based on the Ordinals protocol and generally have an optimistic attitude, with high expectations for the technical progress of the official team.

  

  

  

  

• After Runes' roadshow at the Taipei Blockchain Week on December 16th, a new wave of discussions emerged in the community. Users began to notice the imitation Rune Alpha, and there were doubts about whether the first token Cook deployed based on this protocol could be mapped to the official Runes protocol.

• Users began actively experiencing the Runes protocol on the Bitcoin testnet signet, and community administrators actively assisted users in resolving issues.

• Referring to community conversations, it is evident that Runes and Ordinals' indexes are currently incompatible on the testnet signet. After Runes is officially deployed on the Bitcoin mainnet, users will need to rebuild a unified index.

• Compared to descriptions such as "inscription" in previous protocols, the Runes protocol uses new terms such as "rune" and "etch." The subtle changes in descriptive language also reflect the higher precision and lighter weight of the Runes protocol to some extent.

  

  

  

  

1. OrdinalHub https://discord.com/invite/ordinalhub

• Users in the OrdinalHub community also have high expectations for Runes and want to actively contribute, but feel somewhat helpless due to the slow development progress and lack of information.

  

1. sating.io https://discord.com/invite/kcwE9jH67n

   

Opposition and Resistance

UniSat community https://discord.com/invite/unisat

• The official UniSat team expressed a strong interest in Runes and will keep an eye on the protocol's progress, making adequate preparations for technical support.

  

• Subsequently, UniSat added the Runes module, and the BRC-20 protocol added the token $rune.

• Some individual BRC-20 ecosystem users in the UniSat community have taken sides: "BRC-20 > Runes." Some vested BRC-20 "die-hard fans" staunchly support the BRC-20 protocol, claiming it to be the most orthodox, decentralized, fair, and irreplaceable protocol. They have purchased the BRC-20 protocol token $rune to resist Casey's dominant Runes protocol. (UniSat officials responded to this statement with a "thumbs up" gesture). At the same time, they questioned whether Casey has been "slandering" the BRC-20 protocol because he wants to develop a new protocol.

Neutral Observation

1. ordinex https://t.me/ordinex

The head of the ordinex community stated at the end of October that ordinex has started paying attention to Runes. In theory, Runes as a homogeneous token protocol is superior to BRC-20. However, they also maintain a cautious attitude, stating that ordinary users do not pay much attention to the technical logic behind a protocol. Therefore, the widespread adoption in the market is the key to competition between different protocols.

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2. Leather https://discord.com/invite/67cZyTz8w6

The developers of the Leather wallet have added basic support for Runes on their GitHub: https://github.com/leather-wallet/extension/issues/4273

3. Trac https://discord.com/invite/trac

Positive views on Runes being superior to BRC-20:

According to the incomplete Runes code, its mechanism is not a "fair mint." During registration, all supply will be sent to the registrant's wallet address, and subsequent changes are not yet clear. This is one of the reasons why many BRC-20 supporters criticize Runes. Some users in the Trac community believe that the Pipe protocol combines the advantages of the BRC-20 and Runes protocols.

Conclusion

1. Innovation and Application Value of the Runes Protocol:

The Runes protocol demonstrates the possibility of implementing token functionality in the Bitcoin ecosystem. Its simplified UTXO model and efficient token transfer mechanism bring new dynamics and scalability to the Bitcoin network. This marks a significant expansion of Bitcoin's capabilities, adding new application layers while maintaining its original features.

2. Comparison between Runes and BRC-20 Protocols:

In terms of efficiency and user experience, the Runes protocol shows significant advantages over the BRC-20 protocol. Based on the UTXO model, Runes avoids the reliance on off-chain data and the need for native tokens, providing a smoother user experience. Additionally, the transparency of Runes' issuance mechanism and token transfer process provides users with a clearer and more secure operating environment.

3. Community Response and Acceptance:

The Runes protocol has garnered widespread attention in the Bitcoin community. Despite relatively slow development progress, the community maintains an optimistic attitude towards its technological potential and application prospects. Additionally, the community has shown different reactions to imitation projects such as Rune Alpha, reflecting the complex interests and diverse viewpoints within the cryptocurrency field.

4. Future Prospects and Challenges:

The main challenge facing the Runes protocol is how to maintain its core advantages while further enhancing its feasibility and acceptance in practical applications. In addition, competition with other protocols and the market's adaptability to new technologies are important factors for its future development.

In summary, the Runes protocol, as an innovative attempt on the Bitcoin network, demonstrates its potential in optimizing token operations. Despite challenges from the community, market, and technology, the emergence of Runes undoubtedly injects new vitality and possibilities into the development of the Bitcoin ecosystem. In the future, with the maturation of technology and further market acceptance, Runes is expected to play a more important role in the cryptocurrency field.

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