Can Odin.fun, under the hacker blunder, carry the banner of revitalizing the Bitcoin ecosystem?

Author: Jessy, Golden Finance

Recently, a project called Odin.fun has sparked a wave of interest in a small circle. This is a launch platform for the Runes protocol, similar to Pump.fun. Its recent popularity has brought some heat back to the long-silent Bitcoin ecosystem. On March 7, community members reported that 74 Bitcoins disappeared from the Odin.fun blockchain, possibly due to a hacker attack. Soon after, the project's co-founder responded on X, stating that there was an error in the hard deposit synchronization code, which caused some users' balances to exceed their deposits. Therefore, the 74 BTC deposit transactions could not be found on-chain, and users' funds are currently safe.

When discussing the relationship between public chains and token launch platforms, one cannot help but think of Solana and Pump.fun, as well as Base and Viturals, etc. A hot token launch platform can bring a large amount of traffic to the public chain it is associated with. For example, during the peak of Viturals, the net capital inflow on Base exceeded that of Solana.

This is one of the reasons why token launch platforms are so popular. Unlike other token launch platforms on different public chains, platforms like Odin.fun in the Bitcoin ecosystem do not operate directly on the Bitcoin chain. To enhance user transaction experience and reduce fees, they generally operate on Bitcoin's second-layer network. The challenge they face is that these projects find it difficult to share the security of the Bitcoin main chain, and the recent hacker incident with Odin.fun is a manifestation of this issue.

Another question worth exploring is whether second-layer token launch platforms can attract enough capital and traffic to truly revitalize the Bitcoin ecosystem.

Product Design Logic of Odin.fun

Odin.fun was born in February 2025, founded by the creator of the Bitcoin ordinal market Bioniq. It is essentially a launch and trading platform for the Runes protocol. According to official disclosures, within a month, the trading volume on the Odin.fun platform exceeded 1000 BTC, with the number of platform addresses surpassing 37,000. The leading rune ODINDOG•ID•YTTL•ODIN reached a market cap of over 35 million USD.

The Runes protocol itself is not new; it emerged after the Bitcoin halving in 2024. Developer Casey previously launched the Ordinals inscription protocol, which led to the creation of the BRC-20 token protocol. However, BRC-20 exposed issues such as low transfer efficiency and UTXO expansion. To address these problems, Casey proposed the Runes protocol.

Thanks to the emergence of these two protocols, Bitcoin has gained more asset issuance capabilities beyond just value storage. This has led to explosive development in the Bitcoin ecosystem and related infrastructure in 2023 and 2024.

In the crypto industry, innovation has never ceased, particularly in the way assets are issued. Odin.fun represents a transformation in the asset issuance and trading methods of the Runes protocol.

For a token launch platform, the key to success lies in the design of the "casino" experience—whether it can provide users with a good "gambling" experience.

In terms of user experience, Odin.fun allows for instant issuance of Runes assets and one-click trading of Runes assets issued on the platform.

According to its official explanation, Odin.fun utilizes the second-layer solution Valhalla, achieving final transaction confirmation in 2 seconds.

In addition to speed, users can enjoy convenient features such as account abstraction (no social login), gasless transactions, and no need for repeated signature confirmations.

All of this is made possible because Odin.fun hides the underlying complexity of the blockchain. It is fundamentally a second-layer product built beneath the Bitcoin main chain, and the official term for this second-layer solution is Valhalla.

Since it is built on Bitcoin's second layer, users need to create an account using their Bitcoin wallet and then deposit Bitcoin from their wallet into their account. The process of depositing Bitcoin is essentially a cross-chain transfer of Bitcoin to the second layer created by the project.

While the second-layer solution provides convenience to users, the official has not disclosed how the detailed second-layer technology is implemented. The recent hacker incident gives us a glimpse into some potential vulnerabilities or immaturity in its technology.

According to the co-founder's statement, when users deposit funds into the platform, they are stored in a threshold signature setup, which is a decentralized 12/34 threshold signature configuration that ensures the security of BTC. These funds are then sent to the ODIN•FUN smart contract. All users' BTC is pegged 1:1 to the BTC in the Odin.fun platform. The disappearance of the 74 Bitcoins was due to a deposit synchronization error, which caused them not to be displayed.

How is the security of these deposited Bitcoins ensured? The official explanation is that it is achieved through a multi-signature method. However, multi-signature is not absolutely secure; users cannot manage their own assets but must entrust them to the Odin platform, which essentially follows the logic of a centralized exchange.

Previously, X user @Real0xJason stated that the BTC held by users on Odin.Fun essentially exists on the ICP public chain as ckBTC, with its ultimate security guarantee coming from the ICP public chain. The ICP and Bitcoin mainnet do not require a cross-chain bridge; the ICP chain's fusion encryption technology allows its smart contracts to interact directly with other networks, thus providing higher security than wrapped BTC generated through cross-chain bridges on typical Bitcoin L2s.

As a token issuance and trading platform, the specific rules for token trading are as follows: on this platform, the token launch process is referred to as Ascend, which is the bonding process. Tokens created on Odin will initially trade along a bonding curve. On this curve, 80% of the token supply is sold at a price of 0.211 BTC. In Odin, sats (satoshis) are used as the token price, with an initial price of 0.11 sats (market cap of 3000 USD), completing Ascend at 4.76 sats (market cap of 100,000 USD).

Once Ascend is completed, a project enters the next phase, the AMM phase. According to the official website, once the token is bonded (i.e., Ascend), the remaining 20% of the token supply and 0.2 BTC will be deposited into the AMM pool to support further trading. After that, token trading will follow the AMM curve k = X * Y, rather than the previous bonding curve y = e^x.

For platform users, they can not only launch and trade tokens but also act as LPs. Moreover, the platform adopts a referral rebate marketing model, with 25% of the platform fees going to the referring users.

Can Odin.fun Carry the Banner of Bitcoin Ecosystem Revival?

Currently, the development of the Bitcoin ecosystem is not very optimistic. There is no project similar to the previous inscriptions that can ignite widespread participation. Because of this, the inflow of capital and traffic cannot trigger a new wave of enthusiasm for the Bitcoin ecosystem.

Previously, Pump.fun and Viturals gained popularity due to the hot meme speculation surrounding them, boosting the popularity of Solana and Base itself, leading to the development of their on-chain ecosystems. However, Odin.fun does not seem to have sparked a similar on-chain ecological boom. Moreover, its leading token's total market cap has only reached a maximum of 35 million USD.

However, Odin.fun does not fit this logic. Similar meme pumps have appeared in the Bitcoin ecosystem before; previously, on the Bitcoin second layer Fractal, there was Satspump.fun, on the Lightning Network, there was Lnpump.fun, and on Stacks, there was Stx.city, etc. However, these meme pump platforms on second-layer or sidechain networks have not achieved the same level of prominence as Pump.fun.

After all, a later imitator finds it hard to surpass the success of its predecessor, and a more significant reason is that these meme pump platforms on second layers or sidechains lack the legitimacy of the Bitcoin main chain. The reason Odin.fun has been able to generate some buzz is that it has tapped into the Runes narrative, which is closely related to the Bitcoin mainnet's new asset issuance method. Additionally, during a cold market, there are fewer hot topics available for speculation.

However, the influence of Odin.fun is limited. For the Bitcoin ecosystem, it is not something like inscriptions that possess unique innovation and ample speculative appeal; it merely combines the narratives of runes and meme pumps, both of which are now outdated. Therefore, the project itself can only generate limited enthusiasm, and for the Bitcoin ecosystem, such a weak narrative project cannot carry the banner of Bitcoin revival.

Nonetheless, for investors, small capital participation is possible. To choose a token with potential for exponential growth, one should look at the community and the market makers. Essentially, this is more of a gamble, similar to the meme playstyle.