Runes Protocol in-depth analysis: innovation, advantages and disadvantages, and market status

The Runes protocol, which has been preheated for a long time and is most anticipated by retail investors, has finally been launched along with the BTC halving. Except for the reserved number 0, everyone can register to issue runes. At the beginning of its launch, it overwhelmed the Bitcoin block network, and the transaction fee once exceeded 1,000 sats/vB. According to the Dune Analytics dashboard shared by blockchain research company Crypto Koryo, since the launch of Runes on April 20, more than 2.38 million transactions have been processed, accounting for 68% of the total Bitcoin transactions.

Today, Dr.DODO will take you to know what runes are, what innovations they have, and which inscription projects are worth noting.

What are Runes?  

Ordinals founder Casey Rodarmor believes that the equivalent token schemes currently issued on the Bitcoin network (BRC20, Taproot Assets, etc.) all have their own shortcomings, and a token standard designed with the idea of ​​creating a homogeneous token protocol based on UTXO has emerged.

Key features

• Based on UTXO:Runes balance is held by UTXO, and each UTXO can contain any number of Runes.

• Transaction and protocol information:Outputs containing specific scripts are considered part of the protocol information. These scripts specify how Runes are transferred and distributed.

• Flexibility:The transfer of Runes is defined by interpreting the data push in the transaction, allowing for flexible allocation of Runes to different outputs.

• Issuance:If there is a second data push in the protocol message, it will be treated as an issuance transaction, allowing for the creation of new Runes.

• Simplicity and Decentralization:The Runes protocol is as simple as possible, does not rely on off-chain data, has no native token, and fits into Bitcoin's UTXO model.

• Symbol Assignment:Runes can have symbols associated with them, but the protocol does not try to avoid symbol squatting to keep it simple.

Innovation, advantages and disadvantages

Advantages:

1. Based on UTXO, the model Rune protocol adopts the UTXO model native to Bitcoin. Each UTXO can contain any number of any Rune tokens, which solves the problem of Brc20 junk UTXO expansion and allows Rune to be more naturally integrated into the Bitcoin system.

2. No reliance on off-chain data, all information of the Rune protocol is included in the on-chain transaction, without relying on off-chain data, reducing complexity and improving user experience.

3. Native BTC tokens, unlike sidechains or BTC L2 solutions that require native tokens to pay for handling fees, the operation of the Rune protocol does not require any additional tokens, simplifying the use process.

Disadvantages:

1. There is no mechanism to prevent preemptive registration. In order to keep it simple, Rune does not have a mechanism to prevent preemptive registration of token symbols, which may cause some ideal symbols to be registered prematurely. The current solution is that when Runes are first launched, the length of all token names starts at 13 characters or more. After that, the minimum length of the name is reduced by one letter approximately every four months until the next halving event, when Runes containing only a single character can be created (a total of 26).

2. Long-sized runes are not conducive to dissemination and listing on exchanges

3. Allowing project parties to reserve them has been questioned in terms of fair distribution

How to cast and trade runes

Many tool websites that support Brc20 casting have also simultaneously supported Runes casting, and GeniiData, Runestore and Luminex are the most popular because they can monitor popular inscriptions being cast at the same time, but at the same time, attention should be paid to the relevant handling fees; in addition to the web front-end, there are also TG robots such as BTCBot, which are more convenient and fast to cast runes.

Minting:

1. Unisat - https://unisat.io//runes/inscribe

2. OKX Web3 - https://www.okx.com/zh-hant/web3/marketplace/runes

3. GeniiData - https://geniidata.com/ordinals/inscribe/runes

4. Luminex - https://luminex.io/runes/mint

5. Runestore - https://runestore.io/

6. BTCBot - btcbot.pro

On the other hand, in the trading market, the mainstream MagicEden, Unisat and OKX Web3 are still the largest. From the user experience point of view, ME is the best. The simple interface supports multiple orders at the same time and the transaction fee is the lowest. The previous Brc20 leading market OKX Web3 did not perform well because it did not support order scanning and could only interact with its own OKX Web Wallet.

Trading Market:

1. MagicEden - https://magiceden.io/runes

2. Unisat - https://unisat.io/runes/market

3. OKX Web3 - https://www.okx.com/zh-hant/web3/marketplace/runes

Runes worth paying attention to

The current mainstream of runes is still Meme narrative. The top ten runes are the most concerned. In addition, cats and dogs themes and words mentioned by the founder Casey, such as (WANKO•MANKO•RUNES, ANARCHO•CATBUS) are all within the scope of hype.

Source: https://docs.bsquared.network/architecture

From the 24-hour trading data of MagicEden, the rune market with the largest trading volume, the current leading rune is the inscription DOG•GO•TO•THE•MOON launched by KOL Leonidas’ Runestone project. This project is 100% reserved and airdropped to Runestone holders without open casting. Since there are many Runestone holders and the community has been operating for several months, it is currently the target with the strongest consensus.

The second most traded inscription RSIC•GENESIS•RUNE was airdropped by the NFT project RSIC METAPROTOCOL based on previous mining activities. It is one of the very few inscriptions that have a gameplay mechanism other than pure Memecoin. The project is currently planning to conduct the second phase of mining activities.

The third most traded inscription LOBO•THE•WOLF•PUP is also 100% reserved for airdrops to Runestone and Rune Doors holders, launched by KOL @_BuoyantCapital. Since the airdrop was just issued the day before yesterday, the community is very enthusiastic about it.

SATOSHI•NAKAMOTO, which ranks fourth in trading volume, is the first rune to be successfully listed on the exchange. Before DOG•GO•TO•THE•MOON issued the airdrop, it was the rune with the highest market value and the most holders. Since it is the rune with the least reservation (20%) among the top ten runes, it was the most popular and was listed on the Gate Exchange within two days of the rune protocol being launched. However, its leading position has been surpassed by DOG•GO•TO•THE•MOON and its popularity is no longer there, and no project party has stood up to express the low community consensus.

The No. 1 rune Z•Z•Z•Z•Z•FEHU•Z•Z•Z•Z•Z has a 99% reserve. Many people speculated that the share would be permanently locked, which triggered a wave of people to mint it in the past two days. However, the project owner stated on Twitter that it does not recommend users to mint despite the expensive transaction fees, and that 99% of the share will be given to everyone in the future.

In addition, the No. 13 rune PUPS•WORLD•PEACE and the No. 17 rune MAGIC•INTERNET•MONEY launched by the two Meme Puppet and Wizard communities strongly promoted by the well-known KOL Ansem are 100% reserved by the project owner and will be airdropped to BRC20 and Ordinals NFT holders in the future. They are also worth everyone's continued attention and tracking.

Author's opinion

A few days before the runes were launched, the author also participated in the casting of several rune projects. From the experience, rune casting is quite easy due to the considerable infrastructure of Brc20 inscriptions, and it is not as unchanging as the early inscriptions. However, it also raises the question of what the difference is between runes and inscriptions. BRC20 has been used to issue assets on BTC and BRC20 is quite successful at present. There is no difference in the gameplay of runes for retail investors.

But at the same time, for project parties that want to issue assets on BTC, issuing runes is indeed better than BRC20 in terms of experience. Runes is a more mature asset issuance protocol and can perfectly serve as a substitute for BRC20. However, for Memecoin consensus, community consensus cannot be established overnight. Therefore, it is unrealistic for the Runes Memecoin that suddenly appeared to be compared with Ordi, Sats, etc. For me, I will pay more attention to the runes launched by project parties with mature products or communities rather than runes cast by Fomo just because of the name.