The inscriptions are outdated. Can Runes and runes replicate the surge market?
The hot market for replica inscriptions? Runes are starting to become the biggest narrative on the Bitcoin chain?On April 20, Bitcoin completed its fourth halving at block height 840,000 while introducing the long-awaited Runes protocol. This protocol was proposed by Casey Rodarmor, the founder of the Bitcoin Ordinals protocol, and it utilizes the blockchain's UTXO transaction model to facilitate the issuance of fungible cryptocurrencies in an efficient and user-friendly manner. Additionally, the OKX Web3 wallet timely launched its self-developed Runes marketplace, providing users with a one-stop Runes ecosystem experience, thereby enhancing the overall ecosystem's activity and user convenience.
Unlike previous markets, the current "Runes" hot projects mainly appear in the form of Bitcoin NFTs, characterized by fairness without pre-mining or pre-allocation. These small images of Runes concepts, though simple, have attracted significant attention, especially as the issuance of Runestone approaches and the launch date of the Runes protocol mainnet nears, leading to a continued increase in market enthusiasm. The technical details and market dynamics behind this are crucial for investors, especially when assessing the risks associated with the official interpretation rights of the Ordinals protocol.
Next, the article will further explore the impact and investment opportunities of the Runes protocol.
What are Runes? What problems can Runes solve in the blockchain world?
The Runes protocol, designed by Casey Rodarmor, the founder of the Ordinals protocol, introduces a new type of Bitcoin network asset—Runes. This protocol aims to address the inefficiencies and operational complexities caused by the inscriptions relied upon by the BRC-20 protocol, providing a more streamlined and efficient framework for asset issuance and management.
The Runes protocol boasts excellent compatibility and scalability, enabling seamless integration with Bitcoin's UTXO model and layer two protocols based on it (such as the Lightning Network and CKB). Compared to other fungible token protocols like BRC-20, Runes significantly enhances operational efficiency and user experience through a simplified transaction process and direct management of token balances tied to UTXOs.
Runes supports Simple Payment Verification (SPV) wallets, offering users a lightweight transaction experience that surpasses traditional BRC-20 protocols. It also emphasizes compatibility with existing Bitcoin scripts and address types, providing developers with a more friendly and accessible development environment.
In terms of token issuance, Runes offers tremendous flexibility. It allows token names to range from 1 to 28 characters and employs various innovative issuance mechanisms, such as fixed total supply issuance and public inscription issuance, as well as more expressive issuance methods. These mechanisms not only enrich the token design space within the Bitcoin ecosystem but also enhance its security, effectively avoiding common security risks.
Runes optimizes UTXO management by using OP_RETURN scripts, avoiding the complexities and security risks that may arise from the witness part of transactions, and reducing unnecessary UTXO generation. This approach not only improves the overall health and efficiency of the network but also integrates seamlessly with Bitcoin's infrastructure, encouraging more optimized UTXO usage.
As Bitcoin approaches its next halving, at the significant moment of block height 840,000, the Runes protocol is expected to officially launch. The anticipated launch time is in late April 2024, marking the formal entry of the Runes protocol into the Bitcoin ecosystem and opening a new chapter for the issuance and management of fungible tokens on the Bitcoin network. Furthermore, protocols like Merlin have indicated that they will provide comprehensive technical support for Runestone and Runes, reflecting the Bitcoin community's recognition of the potential of the Runes protocol and showcasing the cryptocurrency community's shared pursuit of innovation and progress.
The launch of the Runes protocol signifies an important technological innovation within the Bitcoin ecosystem, opening new possibilities for diversified development and technological innovation in the Bitcoin network through the simplification of the UTXO model and efficient token transfer mechanisms.
In the early stages of industry development, which Runes projects are worth paying attention to and researching?
Since the Bitcoin halving and the successful launch of the Runes protocol, the activity level in the crypto community has significantly increased, with a celebratory atmosphere akin to a festival surrounding the new protocol. Currently, over 4,700 Runes projects have been initiated, and miner fees have noticeably decreased since the initial launch, providing more favorable entry conditions for investors and participants. After a detailed exploration of these Runes projects, it is found that they can be mainly categorized into the following types, each with investment value:
- Initial Runes projects: Such as UNCOMMON•GOODS and other numbered Runes from 0-9, due to their uniqueness and open participation, it is recommended to participate when gas fees are low to obtain the best narrative value.
- High-heat projects: Such as DECENTRALIZED and DOG•GO•TO•THE•MOON, these projects typically airdrop to early supporters first and then drive prices up as market enthusiasm grows.
- Technology and community-driven projects: THE•RUNIX•TOKEN and SATOSHI•NAKAMOTO demonstrate a model of project development driven by technological innovation or community activities, with SATOSHI•NAKAMOTO receiving significant attention due to its remarkable market performance and widespread holding addresses.
Additionally, interesting MEME-type Runes such as COOK•THE•MEMPOOL and WANKO•MANKO•RUNES have also attracted considerable attention, often possessing unique cultural value and limited-time mint mechanisms, resulting in high price volatility and investment returns.
Community-type Runes, such as PUPS•WORLD•PEACE and MAGIC•INTERNET•MONEY, continue to attract new participants, relying on strong community support and rich social media activities.
Conclusion: The market opportunities for the new round of Runes protocol are broader, but risks need to be controlled in the early stages
When investing in these Runes projects, considering the novelty of the Runes protocol and the uncertainty of the market, it is recommended that investors thoroughly understand the issuance mechanisms, community vitality, and technical support of each project. Although the design of Runes offers higher efficiency and better user experience, there may still be some technical and cognitive barriers in the early stages of the market.
In summary, the launch of the Runes protocol not only brings new vitality to the Bitcoin network but also opens new avenues for the diversification of crypto assets and technological innovation. As these Runes projects gradually unfold, the market will place greater emphasis on technological practicality and community participation, expected to lead a new wave of cryptocurrency innovation.
