A Runes token includes information, such as the smallest split unit, asset name, name separator, symbol, etc.
Runes #3 was deployed by Leonidas, the developer of Ordinals and the founder of the Runestone project.
What are Runes tokens?
Runes tokens are a new type of fungible tokens on the Bitcoin network, native to the Runes protocol leveraging the Unspent Transaction Output (UTXO) model. The Runes Protocol was proposed by Bitcoin developer Casey Rodarmor, the creator of the Ordinals protocol. Bitcoin Runes will serve as a user-friendly, UTXO-based alternative to existing tokenization protocols such as Ordinals, ORC-20, BRC-20, and Stamps.
Underlying Technologies and Advantages of Runes Protocol
The Runes method is called etching. The balance of a Runes is bound to a UTXO. The data of the balance, token symbol and other information are recorded in the OP-RETURN of the transaction. OP-RETURN can be regarded as a note of the transaction (maximum 80 bytes). The json contained in its data marks how many Runes tokens are represented by the UTXO under the BTC transaction. The Runes indexer is required to identify these tokens. In short, Runes is bound to BTC UTXO or BTC UTXO is regarded as a pointer to the Runes token, and OP-RETURN is the assignment statement of the pointer.
Unlike BRC-20, which only uses BTC to store transfer records, Runes tokens are strictly bound to UTXO, allowing them to apply the various benefits that come with BTC UTXO; this method is similar to ARC-20, but the difference is that Runes’ UTXO can represent any number of tokens, while the number of ARC-20 is strictly related to the number of sats contained in the bound UTXO (difficult to split); but at the same time, ARC-20 is less dependent on the indexer, and the legitimacy of Runes token transfers still requires the record of the Ord index ledger.
In the initial distribution process of Runes tokens, token deployers first need to etch the token information and distribution rules. Token information includes the minimum split unit, asset name, name separator, symbol, etc. It should be noted that the name of Runes assets is not limited in length and includes separators including “•”. Such separators may be more complicated, so be sure to identify them when minting new assets. In the distribution rules section, Runes allows deployers to pre-allocate tokens to themselves, so be careful to identify whether it is a fair launch. This feature can be used for the distribution of assets such as Runestone and Rsic.
Adopting Bitcoin’s UTXO model, Runes provides a “harm reduction” solution by reducing unnecessary bloat of the UTXO set, which is a significant problem faced by existing protocols such as BRC-20 and Stamps. Its simplified design is expected to attract more developer interest and participation, which may drive innovation in the Bitcoin development community and attract more mainstream user adoption.
Mainstream Runes Projects
Rune #1 (Z•Z•Z•Z•Z•FEHU•Z•Z•Z•Z•Z): The deployer of Rune #1 is @RuneFehu. The project team pre-mined 99% of the tokens when it was deployed, leaving only 1% for retail investors to mine. So far, the distribution method has not been announced. Speculation in the market suggests that Rune #1 and Rune #8 are likely deployed by the same project, as the websites for both Runes share the same service provider (based on domain and registration information).
Rune #2 (DECENTRALIZED): The deployer of Rune #2 is the NFT project CyberKongz. Initially, the project team pre-mined 100% of the tokens. On April 26, it was announced that 91% of the total supply would be allocated to the holders of the Pre-Rune series Prometheans. 4.5% of the tokens are allocated to the Ordinals community, and 4.5% is allocated to launch contributors. The snapshot block for the distribution was 841,269, and the airdrop will be distributed based on each Promethean rather than each wallet.
Runes #3 (DOG•GO•TO•THE•MOON): Rune #3 was deployed by Leonidas, the developer of Ordinals and the founder of the Runestone project. Leonidas announced on April 21 the birth of the first dog token and 100% of $DOG would be airdropped to Runestone holders. He highlighted the only way to get $DOG is to hold a Runestone. On April 24, Leonidas stated that 100 billion DOG tokens had been airdropped to Runestone holders.
Rune #4 (THE•RUNIX•TOKEN): The deployer of Rune #4 is BVMnetwork. The project offers a total of 21 billion tokens, and the tokens currently circulated account for 10%. BVM, a BTC L2 project, has launched its own Runes DEX product Runechain.
Rune #5 (DOG•DOG•DOG•DOG•DOG), Rune #6 (SATOSHI•NAKAMOTO), and Rune #7 (MEME•ECONOMICS) are anonymous Runes projects. Unlike Rune #5, however, Rune #6 and Rune #7 are minted publicly, and currently 100% of their supply is circulating in the market.
Rune #8 (RSIC•GENESIS•RUNE): The deployer of Rune #8 is Runeocin. The project offers a total of 21 billion tokens, and the tokens currently circulated account for 100%. Rune #9 (LOBO • THE • WOLF • PUP) was deployed by Buoyant Capital. The project offers a total of 21 billion tokens, and the tokens are all in circulation.
Closing Thought
The launch of the Runes protocol is a positive development for Bitcoin miners. They see a windfall thanks to the surge in transaction fees despite the fourth Bitcoin halving, where block rewards were cut in half, from 6.25 BTC to 3.125 BTC. Data analysis reveals a significant spike in transaction fees within the first 18 blocks mined after the halving, reaching as high as $20 million with a substantial portion attributed to activity related to Runes issuance. While the launch of the Runes protocol has generated excitement, real-world use cases are still under development. This raises the question of how this momentum will last after the initial hype and speculative trading subside. Long-term success for the Runes ecosystem will likely hinge on developers creating compelling applications and projects maturing over time.
The post first appeared on HTX Square.
