The Runes protocol deployed by Casey, the founder of Ordinals, is expected to go live on April 20th this week. How can we prepare ourselves to experience and interact with the protocol as soon as it goes live? This article is sourced from Lilyanna, a crypto KOL, and organized and written by BlockBeats.
(Prior Summary: Ordinals founder vowed to commit suicide if the market value of the Runes protocol does not exceed 1 billion pounds in the first month of its launch.)
(Background Supplement: The next wealth boom? Bitcoin runestone: Will distribute three types of meme coins to holders, airdrop to start this month.)
Table of Contents:
Wallet Section
Why do we need to prepare wallets?
Which wallets should we prepare?
UTXO Section
Why do we need to prepare UTXO?
How to prepare UTXO?
UTXO Splitting / Wallet Separation Tutorial
Conclusion
The Runes protocol is a protocol developed by Casey, the founder of Ordinals, for issuing homogeneous tokens on the Bitcoin network. It allows Bitcoin transactions to erode, mint, and transfer Bitcoin’s native digital commodities. It is expected to go live around the fourth Bitcoin halving event (around April 20th).
We believe that all Bitcoin ecosystem enthusiasts have been eagerly awaiting this moment. As the launch approaches, how can we experience and interact with the protocol as soon as it goes live?
Key Points:
1. Prepare Unisat Wallet, OKX Wallet, and Xverse Wallet, deposit some funds, and be ready to switch between wallets conveniently.
2. Split UTXOs appropriately. Don’t have only one UTXO per wallet. Split at least three large UTXOs. However, don’t make them too small. If each UTXO is only a few tens of U, the network fee will be too expensive for future payments.
Wallet Section
Why do we need to prepare wallets?
1. Different third-party platforms may support different wallet types. By preparing multiple commonly used wallets, you can freely switch between platforms.
2. If the popularity of Runes is too high, and one wallet service goes down, you can still use alternative wallets (the probability of service downtime is actually low, so don’t worry).
Which wallets should we prepare?
1. Prepare Unisat Wallet and OKX Wallet, and create multiple addresses.
These two wallets can be imported into each other. In extreme cases, you can import the private key into another wallet. However, it is recommended to use one address in only one wallet under normal circumstances to avoid confusion.
2. Xverse Wallet:
Download link: https://xverse.app/download
Please note that Xverse Wallet has two addresses: BTC addresses starting with 3 and asset storage addresses starting with bc1 (for Ordinals, Runes, Rare Satoshi, etc.).
This mechanism is designed to protect your assets. When making payments or initiating purchase transactions, your BTC address will be used for payment, and the assets you receive will be sent to the asset storage address starting with bc1. Only when you list or transfer specific inscriptions, it will select the corresponding UTXOs from your asset address for listing and transfer, thus separating money and assets to prevent accidental burning.
Transfer your prepared BTC to the BTC addresses starting with 3, not the asset storage addresses starting with bc1! Xverse will not touch the BTC in your asset storage address!
UTXO Section
Why do we need to prepare UTXO?
1. The number of large UTXOs may affect the number of transactions you can process concurrently.
Some platforms or wallets disable unconfirmed UTXOs, which means that if your UTXO is trapped in a previous transaction and has not been returned as change, you can only use other UTXOs for payment. If you have too few UTXOs, even if the amount is large, the number of transactions you can initiate concurrently will be very limited (this is why you often encounter situations on Magic Eden where your balance is sufficient, but you are not allowed to buy).
2. Having too few UTXOs may increase the probability of cpfp, leading to lower subsequent transaction fees.
If the platform or wallet allows you to use unconfirmed UTXOs and you use the unconfirmed UTXO from the previous transaction as input when initiating the second payment, congratulations, you have successfully formed cpfp, and the second transaction will share the gas fee with the previous transaction.
For example, if your first transaction had a fee rate of 100, but the on-chain fee rate soared to 200, and you initiated a new transaction with a fee rate of 220 to try again, the second transaction and the first transaction would form cpfp, resulting in an overall effective fee rate of around 160 (in practice, it may not be evenly distributed due to differences in transaction size and weighting, this is just an example), so the second transaction still cannot be confirmed.
3. Having too many small UTXOs will increase your network fee cost when the wallet combines UTXOs for payment.
In a single transaction, the more inputs you use for payment, the larger your overall transaction size will be, resulting in higher network fees. Therefore, having too many small UTXOs may increase your network fee costs. When the fee rate is 20, you may not have a clear idea, but when the fee rate rises to 200, you will start to feel the pain.
How to prepare UTXO?
1. Store UTXOs in different addresses and be ready to switch to a new wallet if the previous transaction gets stuck. This effectively prevents cpfp. Once the previous transaction is confirmed, you can switch back to the original wallet.
2. Pay attention to the number of large UTXOs in each address, and have at least 3 or more large UTXOs.
There is no specific recommendation for the amount of each UTXO, but it is best not to be less than 500U. If the on-chain fee rate reaches 200 Sats/vB, you will need at least 500U to mint 20 Runes. Having UTXOs smaller than this value may trigger the third situation mentioned above, resulting in high transaction costs due to fragmented UTXOs.
3. If you are preparing UTXOs for a new wallet, you can also transfer a few 600 satoshis (at least 2) to avoid preparing the wallet with high gas fees when scanning orders.
When scanning orders on the market, the market often asks you to prepare wallets, which actually means helping you split 600 satoshis of dummy UTXOs (you need n+1 dummy UTXOs, for example, if you are scanning 5 orders at once, you need 6 dummy UTXOs; if you are only buying 1 item at a time, you need 2 dummy UTXOs). After the transaction is completed, all dummy UTXOs will return to your wallet. The principle of dummy UTXOs is more complicated, and it will be explained in a separate post later.
4. If it is your frequently used wallet, the number of UTXOs and dummy UTXOs has likely been adjusted through change and transactions, so you don’t need to follow the above process. If the UTXO denominations are all small, you can merge them when the gas fee is low. If you don’t understand, it’s okay not to complicate things.
UTXO Splitting / Wallet Separation Tutorial:
1. Connect to your wallet (the one with funds) in the upper right corner of https://wizz.cash/btc/send. Split UTXOs or make transfers from this wallet.
2. Fill in the amount and receiving address as needed. Each line will generate a UTXO that will be sent to the corresponding address.
3. The sum of all lines must be less than the current balance of your wallet.
Then click “Confirm” and sign the transaction.
(Here, the fee mentioned is the estimated network fee, not the platform’s transaction fee. I initially thought it was the transaction fee, but after checking the output, I found that the platform did not receive any portion of it. This service platform should not charge any fees.)
If you don’t understand, just prepare Unisat, OKX, and Xverse wallets with some funds, and you will be fine.
The UTXO tutorial is long to allow everyone to prepare in advance and save on network fees. Even if you don’t prepare in advance, your UTXOs will split automatically as you use them, which may result in higher network fees, but there’s no need to worry.
It is recommended to operate when the fee rate is below 30 and avoid preparing wallets with a peak fee rate of 200! This tutorial is designed to help you save money, not to donate to miners.
Related Reports:
Bitcoin runestone’s floor price surpasses 0.07 BTC! Market value surpasses BAYC to become the second-largest NFT.
Will Bitcoin “runes” surpass inscriptions in the wealth boom? An analysis of the past and present of the Runes protocol and possible alpha.