This article provides readers with a comprehensive overview of the Bitcoin Runes protocol, including an explanation of what Runes are, the differences between Runes and Ordinals, the operating principles of Runes, token issuance and transfer, the Runes ecosystem, and the latest news.
Table of Contents:
1. What are Runes? How are they different from Ordinals?
2. Operating Principles of Runes
3. Token Issuance and Transfer
4. Runes Ecosystem
– Primary Market
– Luminex – Runes Dashboard
– Bitcoinrunexyz
– RuneAlpha
– Secondary Trading Market
– Database
– SatScreener
– RunesMarketCap
– RunesMine
– Browser
– RuneData
– Cross-Chain Bridge
– Runes Bridge
– Wallet
– Prominent Runes Projects
– RSIC
– Runestone
– PUPS
On April 20, 2024, Bitcoin underwent its latest halving event at block height 84,000, and at the same time, the Bitcoin Runes protocol, created by Casey Rodarmor, the founder of the Bitcoin Ordinals protocol, was launched as scheduled.
The launch of the Runes protocol immediately sparked a market frenzy, with Bitcoin transaction fees temporarily breaking free from the impact of the halving and reaching 40.751 BTC. This article provides a complete introduction to the Runes protocol.
What are Runes? How are they different from Ordinals?
Before understanding Runes, let’s first learn about Ordinals and the BRC-20 token standard.
The Ordinals protocol, launched by Bitcoin enthusiast Casey Rodarmor in January 2023, allows users to engrave text, images, videos, and other content on Satoshis, with each Satoshi receiving a unique serial number, similar to NFTs on the Bitcoin blockchain.
Supplemental knowledge: We usually refer to the process of creating Runes as “etching,” which includes attributes such as name, symbol, and quantity. On the other hand, the process of creating Ordinals is called “engraving.”
Based on the Ordinals protocol, Bitcoin developer domodata created an experimental token standard called BRC-20 in March 2023, which allows programmers to create and send interchangeable tokens using the Ordinals protocol.
However, although the BRC-20 token standard was the first to allow users to create native Bitcoin fungible tokens, it also led to the excessive production of “junk” UTXOs, causing network congestion.
Therefore, in September 2023, Casey Rodarmor proposed the Runes protocol to solve this issue and prevent the generation of “junk” UTXOs.
Note: Bitcoin uses the UTXO model, where transactions consist of inputs and outputs. When a transaction occurs, the inputs are consumed and outputs are generated. The remaining outputs are called UTXOs, which can be used in future transactions. In other words, Unspent Transaction Outputs (UTXOs) are the coins left in a wallet after a transaction is completed.
Read more:
Understanding the Past and Present of Bitcoin Runes Protocol
Operating Principles of Runes
Token Issuance and Transfer
To create or transfer Runes tokens, the protocol assigns messages to UTXOs using the OP_RETURN function, which is used to store Bitcoin transaction information.
When issuing Runes tokens, the message sent through the protocol must include two fields: SYMBOL and DECIMALS. The SYMBOL field defines the code of the new encrypted currency for Runes, which can only accept letters from A to Z and does not allow digits or special characters. If the token has already been reserved, the transaction will be rejected. The DECIMALS field specifies the decimal precision of the new token.
For Rune transfers, the message assigned to the UTXOs must include three fields: ID, OUTPUT, and AMOUNT. ID is the identifier of the token being transferred, OUTPUT specifies the UTXO the token is being transferred from, and AMOUNT represents the actual transfer amount.
In addition to these fields, the OP_RETURN message data must also include the uppercase letter R to indicate to the network that it is a Runes transaction.
Runes Ecosystem
Luminex – Runes Dashboard
Luminex provides a platform for etching, forging, and transferring Runes tokens. The forging interface provides information such as forging progress, number of forges, number of users, and Rune numbers, allowing users to sort based on a single criterion. For example, sorting by the number of users can indicate which projects have more potential. This can be done by clicking on “Holders” for sorting.
Clicking on individual projects will provide further information such as pre-mined quantity, holders, and transactions. Additionally, the “ALPHA” page displays a heat map of Rune projects categorized by “number of forges” during different time periods, with more tools expected to be released.
Therefore, this website is considered by many as the primary tool for finding diamonds in the Runes ecosystem.
Bitcoinrunexyz
Bitcoinrunexyz provides a platform for etching, forging, and transferring Runes tokens, and is expected to offer a trading market in the future.
It also has a unique feature that allows users to create referral links for specific wallets. If others use your link to forge Runes tokens, you will receive a 20% commission.
RuneAlpha
RuneAlpha provides etching, forging, and transfer functions, as well as a Rune browser that allows users to search for Rune transactions of specific addresses, which helps track “smart money.”
At the same time, the website also offers a secondary trading market, although on a smaller scale. In the “Cooking” page, the visualization shown below presents the Runes with the highest number of transactions.
Unisat Marketplace
OKX NFT Marketplace
MagicEden: Compared to other platforms, MagicEden is the latest to go live but has received praise from the community for its UI and UX. It currently has the highest trading volume and liquidity in the Runes market.
SatScreener
SatScreener is a real-time database for Bitcoin assets (BRC20, Ordinals, etc.) and Stacks assets, and also covers Rune data, including price, etching number, market cap, trading volume in different time periods (1H, 6H, 24H, 7D), and detailed forging information such as pre-mining, maximum supply, and remaining supply.
RunesMarketCap
Similar to SatScreener, this website provides data on the total market cap of Runes projects, but only lists the top 23 projects in terms of market cap.
RunesMine
After linking a wallet (currently only supporting Xverse, Leather, and Unisat wallets), the “Portfolio” page of this platform will track the Runes tokens you hold and their current value, monitoring changes in value.
The “Runes” page provides information on the total number of Runes, number of transactions, and detailed Rune data (total supply, holders), etc. It also provides etching and forging functions, with a cross-chain bridge expected to be launched.
Runes Terminal
A platform that provides “transaction and address tracking” functionality, which helps track “smart money.” In addition to Luminex and RuneAlpha mentioned above, there are also GeniiData and RuneData.
RuneData
In addition to providing a browser, RuneData also provides real-time information on the hottest Runes in the latest blocks (as shown in the image), as well as comprehensive information about Rune projects and their attributes.
Runes Bridge
Transfers Runes between Bitcoin and other EVM L1 chains, currently supporting RunesBridge, SATOSHI•NAKAMOTO, and MEME•ECONOMICS assets.
Prominent Runes Projects
RSIC
RSIC is a collection of 21,000 Ordinals and has launched a token called RUNE, which has been airdropped to NFT holders and wallets that hold certain other Ordinals engravings, such as Ordinal Maxi Biz.
Currently, RSIC is listed on the OKX exchange with a market cap of approximately $200 million.
Runestone
Runestone is an Ordinals project created by the pseudonymous NFT and Ordinals enthusiast Leonidas. The project consists of 112,383 Rune stones, which have been airdropped to Ordinals wallets that hold at least three engravings prior to January 20, 2024 (the one-year anniversary of the Ordinals protocol). Additionally, Runestone has airdropped the DOG token (a dog-themed meme coin) to holders, currently the largest market cap token in the Runes ecosystem.
PUPS
PUPS tokens are minted on BRC-20 but have “migrated” to Runes through a process of burning and minting after the protocol was launched.
.2024-05-20
Casey’s Bold Claim Falls Flat: Bitcoin Runes Celebrates One Month Online, Fails to Reach £1 Billion Market Cap, Announces Ritual Suicide Date…
Bitcoin Runes protocol founder Casey Rodarmor made a bold statement that if the market cap of the Runes ecosystem did not reach $1 billion within one month of its release, he would perform ritual suicide. Now that one month has passed and the market cap of the Runes ecosystem has not reached $1 billion, Casey Rodarmor has responded to this.
.2024-05-20
Bitcoin Runes Trading Volume Drops by 99% from Peak, Fees Below $3, Has the Market Calmed Down?
The Runes protocol, which launched simultaneously with Bitcoin’s halving, quickly became the market focus. Runes experienced its highest trading volume on the 23rd, with over 750,000 transactions. However, from the 25th until now, there have been only about 77,000 transactions, indicating a cooling trend.
.2024-04-21
Runes Launch Ignites FOMO Frenzy! Bitcoin Transaction Fees Surge Above £200, Satoshi Nakamoto Namesake Token Soars 600%
Runes, the Bitcoin fungible token protocol, went live yesterday, sparking a frenzy of etching Rune tokens. This surge in demand for Runes tokens led to a significant increase in Bitcoin transaction fees, with the Satoshi Nakamoto namesake project SATOSHI•NAKAMOTO having over 20,000 wallets holding the token and experiencing a 600% daily increase in value.
Read more related reports about Bitcoin Runes:
Related Reports
Runes Frenzy: Bitcoin Market Cap/Transaction Fee Ratio Hits Five-Year Low Compared to Ethereum, Can It Be Sustained?
Analyst: Less than 0.4% of Over 20,000 Rune Tokens Are Successful
OKX Jumpstart Launches Runecoin Staking, RSIC•GENESIS•RUNE Floor Price Soars 40%