Author: dt, DODO Research
After a long period of anticipation, the most awaited Runes protocol for retail investors finally went live alongside the BTC halving. Apart from the reserved 0 number, everyone can register and issue Runes. At the beginning of the launch, it caused congestion in the Bitcoin block network, with transaction fees reaching over a thousand sats/vB at one point. According to the blockchain research company Crypto Koryo's shared Dune Analytics dashboard, since the launch of Runes on April 20th, it has processed over 2.38 million transactions, accounting for 68% of the total Bitcoin transaction volume.
Today, Dr. DODO will introduce everyone to what Runes is, its innovations, and the noteworthy runic projects.
What is Runes?
Casey Rodarmor, the founder of Ordinals, believes that the current tokenization schemes on the Bitcoin network (BRC20, Taproot Assets, etc.) have their own flaws, leading to the idea of creating a token standard based on UTXO and designing the Runes protocol.
Key Features
- Based on UTXO: Runes balances are held by UTXO, and each UTXO can contain any amount of Runes.
- Transactions and protocol information: Outputs containing specific scripts are considered part of the protocol information. These scripts specify the transfer and allocation of Runes.
- Flexibility: The transfer of Runes is defined by interpreting data pushes in transactions, allowing flexible allocation of Runes to different outputs.
- Issuance: If there is a second data push in the protocol message, it will be considered an issuance transaction, allowing the creation of new Runes.
- Simplicity and decentralization: The Runes protocol is designed to be as simple as possible, not relying on off-chain data, having no native tokens, and being suitable for Bitcoin's UTXO model.
- Symbol allocation: Runes can have associated symbols, but the protocol does not attempt to prevent symbol squatting to maintain simplicity.
Innovation, Advantages, and Disadvantages
Advantages:
- Based on UTXO, the Rune protocol adopts the native UTXO model of Bitcoin, allowing each UTXO to contain any amount of any Rune token, solving the problem of BRC20's UTXO bloat, making Rune more naturally integrated into the Bitcoin system.
- Independent of off-chain data, all information of the Rune protocol is contained in on-chain transactions, reducing complexity and improving user experience.
- Native BTC token, unlike protocols that require native tokens to pay fees, the operation of the Rune protocol does not require any additional tokens, simplifying the usage process.
Disadvantages:
- Lack of anti-squatting mechanism, to maintain simplicity, Rune does not have a mechanism to prevent squatting of token symbols, which may lead to some ideal symbols being registered prematurely. The current solution is that when Runes first went live, all token names were at least 13 characters long, and then approximately every four months, the minimum length of names would decrease by one letter until the next halving event, at which point Runes with single-character names (a total of 26) can be created.
- Long names of Runes are not conducive to promotion and listing on exchanges.
- Allowance for project reservations, questioned for fairness in distribution.
How to Forge and Trade Runes
Many websites that support BRC20 forging also support Runes forging. Among them, GeniiData, Runestore, and Luminex are the most popular because they can monitor the forging of popular runic inscriptions, but attention should be paid to the related fees. In addition to the web front end, there are Telegram bots like BTCBot, which make it more convenient to quickly forge Runes.
Forging:
- Unisat - https://unisat.io//runes/inscribe
- OKX Web3 - https://www.okx.com/zh-hant/web3/marketplace/runes
- GeniiData - https://geniidata.com/ordinals/inscribe/runes
- Luminex - https://luminex.io/runes/mint
- Runestore - https://runestore.io/
- BTCBot - btcbot.pro
As for the trading market, MagicEden, Unisat, and OKX Web3 are the most popular. Currently, in terms of user experience, ME is the best, with a simple interface that supports multiple order scanning and the lowest transaction fees. The previous BRC20 leading market, OKX Web3, did not perform as well because it does not support order scanning and can only interact with its own OKX Web Wallet.
Trading Market:
- MagicEden - https://magiceden.io/runes
- Unisat - https://unisat.io/runes/market
- OKX Web3 - https://www.okx.com/zh-hant/web3/marketplace/runes
Noteworthy Runes
Currently, the mainstream of Runes is mainly based on meme narratives. The top ten Runes are the most popular, and apart from that, themes such as cats, dogs, and words mentioned by founder Casey (WANKO•MANKO•RUNES, ANARCHO•CATBUS) are all within the scope of speculation.
Source: https://docs.bsquared.network/architecture
Looking at the 24-hour trading data of the largest Runes market, MagicEden, the current leading runic inscription is DOG•GO•TO•THE•MOON, a project launched by KOL Leonidas from the Runestone project, which is 100% reserved and airdropped to Runestone holders without open forging. Due to the large number of Runestone holders and several months of community management, it is currently the most consensus-driven target.
The second most traded runic inscription, RSIC•GENESIS•RUNE, is an NFT project from RSIC METAPROTOCOL, a rare inscription with gameplay mechanisms rather than being purely a Memecoin, airdropped based on previous mining activities. The project team plans to carry out the second phase of mining activities.
The third most traded inscription, LOBO•THE•WOLF•PUP, is also 100% reserved and airdropped to Runestone and Rune Doors holders, launched by KOL @_BuoyantCapital, and due to the recent airdrop, it has a high community activity.
The fourth most traded SATOSHI•NAKAMOTO is the first runic inscription to successfully list on an exchange. Before the airdrop of DOG•GO•TO•THE•MOON, it was once the most widely held and highest valued runic inscription among the top ten, as it reserved the least (20%) of the runic inscriptions. Therefore, it was the most popular in the first two days of the Runes protocol going live and was listed on the Gate exchange. However, its popularity has waned since being surpassed by DOG•GO•TO•THE•MOON, and there is a low community consensus due to the lack of a project team standing up.
The fifth most traded inscription, Z•Z•Z•Z•Z•FEHU•Z•Z•Z•Z•Z, reserved 99% of its allocation. Many people speculated that this allocation would be permanently locked, sparking a wave of people to forge it in the past two days. However, the project team stated on Twitter that they do not recommend users to forge at high transaction fees and indicated that the 99% allocation will be available to everyone in the future.
In addition, the two major Meme Puppet and Wizard communities, strongly promoted by well-known KOL Ansem, have released the 13th inscription PUPS•WORLD•PEACE and the 17th inscription MAGIC•INTERNET•MONEY, both of which are 100% reserved by the project team and will be airdropped to BRC20 and Ordinals NFT holders in the future. These are also worth continuous attention and tracking.
Author's Opinion
In the first few days of the Runes launch, the author also participated in the forging of several runic projects. In terms of experience, forging Runes is quite easy due to the substantial infrastructure built on BRC20 inscriptions. It is not as complex as early inscriptions, but it also raises the question of what the differences are between Runes and inscriptions. The narrative of asset issuance on BTC already has BRC20, which has been quite successful so far. For retail investors, there is no difference in gameplay between Runes and BRC20.
However, for project teams looking to enter the field of asset issuance on BTC, issuing Runes is indeed a better experience than BRC20. Runes is a more mature asset issuance protocol and can serve as a perfect substitute for BRC20. But in terms of Memecoin consensus, community consensus is not something that can be established overnight. Therefore, the emergence of Runes Memecoin as a benchmark against Ordi, Sats, and others is not practical. For the author, more attention will be focused on runic inscriptions launched by project teams with mature products or communities, rather than solely on runic inscriptions forged due to their names attracting FOMO.
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