Runes: A New Era For Memecoins On Bitcoin - MVHQ

Runes: A New Era For Memecoins On Bitcoin

BTCAlchemist
Apr 15, 2024
Altcoins
General Strategy
Runes: A New Era For Memecoins On Bitcoin

There is a storm brewing on Bitcoin…not just the massive ETF inflows, the price doubling in one month, or the halving in April. It is runes, the new fungible token protocol on Bitcoin.

 

Casey Rodarmor, creator of both runes and ordinals, said his motivation is to create a “product-market fit for degens who would contribute to the Bitcoin fee market.”

 

Info about the runes protocol and app development is veiled in secrecy (like the book “Dark Forest”), but this report aims to give you the key points. Buckle up for a new era of memecoins on Bitcoin.

 

What Is The Runes Protocol?

Runes is a fungible token protocol on Bitcoin that improves upon the BRC-20 standard. The runes protocol was created by the founder of ordinals, Casey Rodarmor. Runes will go live at the halving block 840,000 (late April 2024).

 

While BRC-20s require an ordinal inscription for every operation, which creates many small garbage UTXOs (chunks of BTC), runes do not. Instead, runes tokens move directly with the UTXO on which they were created. The simplicity of runes also improves upon other Bitcoin token protocols, such as Counterparty (requires a complex indexer and uses a native token) and RGB (relies upon off-chain data). Runes live entirely on-chain.

 

Benefits of Runes

  • UTXO-based to avoid junk UTXOs
  • Runes indexer is simple and rune balances may be read by light clients (e.g. software wallets)
  • Users cannot create transfers for someone else’s wallet, which is possible with BRC-20s
  • Novel token feature possibilities:
  • Open mints or mints limited to block height
  • Link a rune to an ordinal inscription, e.g. create a rune under an inscription or create them at same time
  • Fractionalized ownership of an inscription through parent-child inscription with connected runes
  • Burn sats to mint runes
  • Rune name lengths can be up to 28 characters. At launch, users can deploy runes of 13-28 characters. Over 4 years, the shorter-length runes become available.

 

 

How Can We Participate?

 

When

Runes will go live at the Bitcoin halving block 840,000 (late April 2024).

 

The First Runes Deployments

The first 10 runes token deployments will be hard-coded into the protocol by Casey Rodarmor, with no pre-mine [update: there is a chance that only 1 token will be hard-coded]. There may be a lot of hype and speculation on these initial rune deployments. The subsequent runes token deployments after the first 10 may also have significant competition and hype, being the first organic runes deployments. Therefore, the ability to mint or trade these early runes deployments may hold great potential. Beware of high fee rates.

 

Runes Ordinals Collections

Existing ordinals collections have gained hype due to their claim to give users an allocation of their related rune token after runes go live (e.g. RSIC, Runestone, Runes Genesis Miners, The Rune Guardians). This is highly speculative since we do not know how quickly these projects will deploy their runes or the mechanism with which their runes will be distributed to holders.

 

Deploy Your Own Rune

If you feel daring and/or creative, you could deploy your own rune using ord wallet.

 

Runes Wallets

Use a wallet that will support runes.

Xverse plans to support runes, but runes support is not ready as of the time of this writing https://www.xverse.app/runes-wallet 

 

Get Ready & DYOR

“After Runes release and the halving, the fees are just going to be so high that people might not be able to inscribe anything for a long time”

-ChartFu, founder of MagicEden

 

As usual, do your own research and only risk what capital you are willing to lose. Please share any questions or comments and feel free to tag me, BTCAlchemist.

 

Misc Technical Info

  • The runes protocol will be published within the ord protocol
  • There is an output with an OP_RETURN followed by data that signals a protocol message
  • Some parameters include divisibility, rune name, symbol, decimal, and supply
  • A numeric identifier is assigned to each rune deployment
  • A transfer function splits a UTXO into multiple UTXOs holding different amounts of runes to send records to recipients