What should be understood in advance before the launch of the Bitcoin Runes protocol?

Original Author: 0xSea.eth

Editor's Note: In December last year, Ordinals founder Casey announced that the Runes protocol mainnet would launch during the next Bitcoin halving at the Taipei Blockchain Week. With only two months left until the launch, crypto KOL 0xSea.eth has compiled and introduced detailed information about Runes on X. The full text is as follows:

Understanding the Bitcoin Layer 1 Runes Protocol Two Months in Advance: What Alpha Opportunities Are There?

If Ordinals and Atomicals, the two strongest BTC L1 protocols, were born in obscurity, then Runes is being launched under the spotlight of the entire industry. As the founder of the Ordinals protocol, which opened the "Pandora's box" of the Bitcoin ecosystem, Casey Rodarmor (@rodarmor) announced the launch of the Runes protocol in September last year, attracting the attention of the entire ecosystem.

Now, with only two months until Runes is officially launched, what Alpha opportunities are available?

1/ Why Runes?

In the first chapter of the previous article "A Brief History of New BTC L1 Protocols That Even a 60-Year-Old Grandma Can Understand," we mentioned that Casey originally created the Ordinals protocol for art/NFT on-chain, not for issuing tokens. However, the emergence of BRC-20 broke this situation, and the trading volume of BRC-20 has dominated the entire Ordinals protocol. With the two waves of excitement for BRC-20 last year, the industry accepted the existence of this inscribed token, and Casey changed his perspective: although 99% of tokens are scams and gimmicks, they are like casinos and will not disappear. Creating a good token protocol for Bitcoin could bring considerable transaction fee income, attract more developers and users, and ultimately expand BTC's usage. Therefore, on September 26, 2023, Casey published the complete concept of Runes through his blog, which is to build a new fungible token protocol on Bitcoin. Article link: https://rodarmor.com/blog/runes/

In this article, he pointed out some issues with existing protocols like BRC-20, RGB, and Taproot Assets, proposing that a better BTC token protocol should be simple, not reliant on off-chain services, and based on UTXO. This is the core idea and origin of Runes, commonly referred to as the "Runes Protocol" in the Chinese community. By the way, the unofficial symbol for Runes is ▣, while the symbol for Ordinals is ◉.

2/ When Will Runes Launch?

Just five days before Casey published the article, on September 21, the atomic protocol @atomicalsxyz was also launched, with the first token $atom being minted for free in five hours via proof of work (PoW), bringing another innovation to Bitcoin L1. Therefore, in the following months, the market had high expectations for Runes, and many were preparing to grab the first token on the Runes protocol.

However, during these months, Casey's team had to maintain the normal upgrades of Ordinals while also dealing with peculiar bugs like cursed inscriptions (introduction article: https://twitter.com/0xSea/status/1743512063593546052), and the launch time for Runes remained uncertain. It wasn't until December 16 that Casey announced the launch time for the Runes protocol mainnet at the Taipei Blockchain Week event, which would be released at Bitcoin block height 840,000, coinciding with the fourth Bitcoin halving, expected to be around late April.

Now, with less than two months until Runes is officially released, we hope Casey has completed the game Baldur's Gate 3 and will not delay the release of Runes any further.

3/ But It Seems There Are Already Several Protocols Called Rune

As mentioned above, Casey announced the concept of Runes on September 26 and has been updating the code related to Runes on Github for several months. Although the Runes protocol has not officially launched, many developers are eager to create projects based on it.

There are two categories here: one is to create similar protocols to Runes, and the other is to develop specific projects. First, regarding protocol types, there are two main projects: The first is the @PipeBtc protocol launched by Benny, which is the first protocol based on the concept of Runes and has acted very quickly. Those unfamiliar with Benny can refer to the second chapter of the article "A Brief History of New BTC L1 Protocols That Even a 60-Year-Old Grandma Can Understand," where Benny is described as an energetic, idea-rich technical speculator who has launched multiple tokens.

The second is @runealpha_btc, which launched in December and is similar to Pipe. The first token on Runealpha is Cook, but it does not limit the total number of tokens or the number of tokens; instead, it limits 150 blocks (equivalent to a time limit), meaning that any minting within that block range counts. Last week, I saw Runealpha's financing BP through other channels, and the project's upcoming positioning is to become the infrastructure for the Runes protocol, including browsers, indexing, trading platforms, etc. The $Cook token is also expected to migrate to the Runes protocol, but specific rules are yet to be determined.

4/ There Are Also Some Runes Concept Projects

In addition to the aforementioned protocol types, the second category consists of specific projects. These projects have emerged in the last 1-2 months, primarily based on the logic of leveraging strong market expectations to conduct rehearsals before Runes officially launches at block 840,000. They aim to establish community consensus by issuing NFTs on Ordinals first, and once the Runes protocol is officially deployed, they will issue project tokens on the Runes protocol and airdrop to NFT holders. Below are some of the projects I have noticed in this category; if I missed any, please forgive me and feel free to add in the comments below.

1) RSIC

RSIC stands for Rune Specific Inscription Circuits, which is an NFT on Ordinals with a total of 21,000 pieces, 10% of which are reserved by the project team. 90% of RSIC was airdropped to holders at the team's expense, costing over 3 BTC, earning praise from the community for its grand vision. The specific airdrop rules and standards have not been disclosed, but it is speculated to be based on the blue-chip NFTs held in wallets. Since it is an airdrop, some wallets may not be aware they received the NFT, so a transfer (buying/selling or transferring to oneself) is required to activate it. Once activated, users can start "mining," which involves mining a share of a future token that the project team plans to deploy on Runes. This also demonstrates that the RSIC project team is an OG in the Ordinals ecosystem, as it would be difficult to gain quick support from the Ordiscan browser otherwise. Due to space constraints, more details about RSIC will not be elaborated here; interested readers can check out the article previously written by @lilyannabtc: https://twitter.com/lilyannabtc/status/1749639096853745957

· Official Twitter: @rune_coin

· Official Website: https://runecoin.io

· More Documentation: https://ordiscan.com/inscription/126 to browse its multiple child inscriptions for more interesting details

· Magic Eden Collection: https://magiceden.io/ordinals/marketplace/rsic

· Mining Query: You can enter your wallet address at http://ordiscan.com to check in the Runes section.

2) RSIC Boost

RSIC Boost is an additional tool launched by the RSIC project. This time it is not an airdrop; instead, wallets holding RSIC need to mint (costing around ~$170 or more) to accelerate the RSIC mining process. This move further filters out active wallets on-chain, increases market competition, and once again proves that the project team knows how to create excitement.

Currently, the total supply is 3.9K, Magic Eden Collection: https://magiceden.io/ordinals/marketplace/rsic-boost

3) Rune Mania Miner

Indeed, soon after, a project team airdropped to RSIC Boost holders (who also hold RSIC), and this project is Rune Mania Miner. The total supply is 3,800 pieces, with 3,547 airdropped to the community and 253 reserved by the team. Like RSIC, it also requires a transfer (to oneself is acceptable) to activate and start mining.

· Official Twitter: @RuneManiaMiner

· Official Website/Documentation: https://ord.io/61549984

· Magic Eden Collection: https://magiceden.io/ordinals/marketplace/rmm

· Mining Query: None available yet.

4) Runestone

Runestone is another highly anticipated airdrop project following RSIC, led by the well-known KOL in the Ordinals space, @LeonidasNFT. Over the past two weeks, Leonidas has raised funds from the industry through X, with each person donating 0.15 BTC × 15 people = 2.25 BTC for airdrop gas expenses, which has now been completed. RSIC also provided a donation of 0.15 BTC.

At the same time, the airdrop rules for Ruestone are relatively transparent: at block height 826,600, wallets need to hold 3 inscriptions, excluding those starting with "text/plain" or "application/json," such as BRC-20, which do not count.

Currently, the number of whitelisted wallet addresses announced by Runestone has reached 113,376, making the airdrop scale significant. Once everything is prepared, the official airdrop should take place soon.

· Check if you are on the whitelist: via https://runestone.lfg.cash or https://docs.google.com/spreadsheets/d/1FKJd0h6O5X1R0ooNBx2pH47xi3CsCY8xczhI25YROVw/edit#

· Magic Eden Collection: None available yet.

· Mining Query: None available yet.

5) The Rune Guardians

Guardians also have a similar gameplay to RSIC, airdropping to blue-chip NFT holders on Ordinals, with the project team covering all gas costs, but specific rules have not been disclosed.

· Official Twitter: @RuneGuardians

· Official Website: http://theruneguardians.com

· Magic Eden Collection: https://magiceden.io/ordinals/marketplace/trg

· Mining Query: None available yet.

In addition to the projects mentioned above, I have also participated in several other paid projects, such as RuneDogecoin, which has a tiered minting fee followed by an airdrop but lacks specific products and a roadmap; and Genesis Runes, which promoted itself as free but actually charged a "developer fee" of $50 per piece, with a total supply exceeding 33.7K. Later, some were repurchased and burned, but the total still reached 29.9K, and the current price has already dropped below the initial value.

5/ How to Participate in Runes?

Alright, back to Runes itself.

Casey has also noticed that the speculation around Runes in the market is heating up, with many project teams eager to become the first token, so Casey recently decided that he would deploy tokens numbered 0-9 himself, with specific names being collected from the community. Moreover, when Runes first launches, all token names will have a length of 12 characters or more, while tokens with lengths under 12 will be gradually released, allowing project teams in need to pay (burn) for shorter token tickers. The image below was posted by Casey last October, and the BTC price has nearly doubled since then.

Therefore, once Runes officially launches, there are several ways to participate in Runes:

1) Directly mint the first 10 tokens numbered 0-9 deployed by Casey's team, names to be determined. Given the high attention on Runes and the complete infrastructure ecosystem of Ordinals, it is expected that many bot tools will support it immediately, and local BTC full nodes may not be necessary. This is likely to trigger a gas war for a period.

2) Hold the NFTs or credentials from the aforementioned projects, as well as other "pre-mined projects" launched within the next two months, and directly receive corresponding airdrops once the project teams deploy their respective tokens on Runes.

6/ What Is the Relationship Between Runes, Ordinals, and BRC-20?

With the launch of Runes, we can take another look at the protocol landscape of BTC Layer 1.

Previously, I thought Runes was a parallel protocol to Ordinals, but I recently discovered that this is not the case. Runes and Ordinals share the same Github codebase, and structurally, Runes and Inscriptions are on the same level. To put it more plainly, Runes and BRC-20 are peer-level token protocols, both belonging to the Ordinals ecosystem. However, from Casey's team's perspective, BRC-20 is an "unofficial" token protocol, while Runes is more like an "official" token protocol.

The competition between Runes and BRC-20 is about to begin, and Runes is expected to attract more people to deploy/speculate on altcoins in the short term. Of course, the ordi of BRC-20 remains the first altcoin on Bitcoin, which is an undisputed fact.

Additionally, I am also curious whether Runes has any undisclosed innovations beyond being a "token issuance protocol," which we may have to wait until Runes is officially released to see.

7/ Conclusion

Overall, based on Casey's team's influence and the well-established infrastructure of Ordinals, Runes has the potential to trigger a third wave of excitement in the BTC ecosystem.