Due to the new expectations brought by the founder of Ordinals, the “Runes” tokens launched on the day of Bitcoin halving saw a surge in popularity. It can be said that the Bitcoin blockchain was exceptionally lively that day, with transaction fees skyrocketing to hundreds or even thousands of dollars. This not only led to congestion on the Bitcoin network but also resulted in daily mining revenue exceeding $100 million, setting a new record.
Since its launch after the halving, Runes has accounted for more than two-thirds of Bitcoin’s trading volume. In addition, several mainstream platforms such as UniSat, OKX, and MagicEden have also started supporting the Runes market. With the development over this period, let’s briefly understand some of the progress in the Runes market:
01
What exactly are Runes?
Runes, as a new Bitcoin token protocol, was proposed by Casey, the founder of the Ordinals protocol. Its goal is to solve the problems related to BRC-20 tokens, especially the congestion and poor user experience caused by a large number of unused transaction outputs (UTXOs) on the Bitcoin network.
Advantages of Runes:
1) Simplifies the process of creating fungible tokens on the Bitcoin blockchain, reducing the use of blockchain resources.
2) Compared to other solutions such as BRC-20, RGB, and Taproot, Bitcoin Runes provides users with a simpler way to create and manage tokens, improving token usability and exchangeability while avoiding the generation of a large number of useless UTXOs.
3) Runes use the OP_RETURN model, which saves more Bitcoin network resources compared to the space occupied by BRC-20 tokens.
4) Since Runes inherits Bitcoin’s UTXO model and is highly compatible with the Bitcoin blockchain, Runes tokens can seamlessly integrate with the Bitcoin ecosystem, enjoying the security and stability of the Bitcoin network.
It can be said that the Runes protocol is more concise, efficient, and developer-friendly compared to the BRC-20 protocol. Some people feel that the current name of Runes is too long compared to the four-letter inscription of BRC-20, but Casey intentionally designed it to prevent name squatting. The length of the name is between 1 and 26 characters, but initially, only names with 13 or more characters can be carved. With every 17,500 blocks, the minimum number of naming letters will decrease by one character. In about four years, all names can be used, creating a dynamic naming environment.
02
Major platforms supporting Runes
Currently, the major platforms that support the minting of Runes tokens are UniSat, OKX, and MagicEden. Each platform has its own advantages and disadvantages, but generally using these three platforms is sufficient.
UniSat and MagicEden have batch scanning functions and have better depth in various aspects compared to OKX. This is mainly because overseas users prefer to use UniSat, and the popularity of Runes is higher overseas than in China. Personally, I usually use UniSat and MagicEden for comparison and use OKX for initial offerings.
Looking at the Gas on the Bitcoin blockchain, it can be seen that the overall popularity of Runes is not high at the moment. Recently, there have been voices of fear, uncertainty, and doubt (FUD), with many KOLs criticizing the Runes protocol’s minting system and high gas fees. The high gas fees have hindered most buyers from participating in the market, resulting in more selling and ultimately lowering the price of mining revenue.
As for the future development of Runes, it is still unknown. After all, BRC-20 took several months to become popular after its launch.
03
Characteristics of high-quality Runes
Currently, the gameplay of Runes is similar to that of Meme tokens, with traffic being the key factor. Here are some criteria for judging:
1) Are there well-known KOLs with their own traffic? Support from well-known artists and celebrities, such as Casey, and KOLs related to top projects.
2) Special meanings, such as SATOSHI•NAKAMOTO or connections to certain top projects.
3) Support from top project teams or communities, such as SHIB or Node Monkeys, Puppets, which are starting to support Runes in addition to Bitcoin NFTs.
4) Number of holder addresses, which is generally related to popularity and the number of participants.
5) Is there pre-mining, and what percentage? Generally, Runes with pre-mining are not favorable unless they have a particularly good concept.
With the emergence of various new things, comprehensive judgment is often required.
04
Classification of Runes
Currently, Runes can be mainly divided into three categories:
1) Airdrop type led by project teams:
Projects launched by Ordinals OG (Original Gangster), such as Runestone, RSIC, directly snapshot for NFT holders, and the price of NFTs usually experiences a sharp drop after the snapshot.
Well-known projects on Ethereum or other chains, such as Prometheans.
2) KOL endorsements and artists:
Influential KOLs like Casey and LEO have endorsed several Runes tokens. It is important to understand the KOLs and their endorsement patterns, as some KOLs endorse new tokens every few days, which can be overwhelming.
3) Tokens with specific meanings:
Tokens like 0号符文 (UNCOMMON•GOODS) that require four years to mint, similar to Sats in BRC-20. These tokens have a long time cycle and concepts related to SATOSHI•NAKAMOTO, which are understood by those familiar with it.
0-9号符文 (0-9 Runes):
0号符文 (UNCOMMON•GOODS): Deployed by Casey, the founder of Ordinals, with no pre-mining and a mining period of four years. Anyone can participate, and it is similar to Sats in BRC-20, with a large total supply and a long time cycle, making it suitable for positioning during a bear market.
1号符文 (Z•Z•Z•Z•Z•FEHU•Z•Z•Z•Z•Z): Total supply of one billion, 99.99% pre-mined. In the first few days, there was a frenzy of trading as retail investors gambled on the project team destroying the pre-mined tokens. However, the project team later announced that they would airdrop a portion of the pre-mined tokens.
2号符文 (DECENTRALIZED): Belongs to the Ethereum NFT blue-chip CyberKongz, with 100% pre-mining. Some tokens were airdropped to Prometheans NFT holders, and the price of Prometheans has been rising.
3号符文 (DOG•GO•TO•THE•MOON): Belongs to Runestone, with 100% pre-mining. It has already been airdropped to Runestone holders and has a total market value of around $400 million, making it the leading Runes token. The founder is very active on Twitter and has been promoting DOG.
4号符文 (THE•RUNIX•TOKEN): A project of L2 project RuneChain under BVM, with 100% pre-mining. Rune holders can mine Runes tokens.
5号符文 (DOG•DOG•DOG•DOG•DOG): Anonymous team, with 100% pre-mining. Currently, there is no detailed information available.
6号符文 (SATOSHI•NAKAMOTO): 20% pre-mining, relatively high popularity. It has been listed on some smaller exchanges, but the high pre-mining percentage by the project team is a point of criticism.
7号符文 (MEME•ECONOMICS): Anonymous team, 20% pre-mining, with a concentration of chips.
8号符文 (RSIC•GENESIS•RUNE): Belongs to RSIC, with 100% pre-mining. Airdropped to previous RSIC mining participants based on points. It was listed on OKX Jumpstart yesterday.
9号符文 (LOBO•THE•WOLF•PUP): Deployed by Buoyant Capital, with 100% pre-mining. Airdropped to Runestone and Rune Doors holders, with a small portion reserved for project operations.
It can be seen that the 0-9号符文 (0-9 Runes) are mostly led by project teams, with most of them conducting 100% pre-mining and then airdropping to their own project holders.
Meme tokens:
WANKO•MANKO•RUNES: A concept by Casey, and after the minting of the token, Casey commented and tweeted appreciation for it. Casey has also retweeted tweets related to this token multiple times.
ANARCHO•CATBUS: A concept by Casey, which Casey has mentioned multiple times on Twitter and has added related hashtags in his Twitter bio. However, Casey has never endorsed this token. (“Endorsing a project” is a cryptocurrency slang term referring to a high-risk investment project in the cryptocurrency field that lacks real value support and relies solely on continuously introducing new investor funds to pay returns.)
SEPPUKU•IN•MAY•AND•GO•AWAY: A concept by Casey. On the day the token was deployed, Casey expressed his attention to this token on social media platforms. Within a few hours, the token was fully bought up. This meme originated from a previous tweet by Casey stating that if the market value of the token ecosystem did not reach $1 billion within the first month of launch, Casey would commit seppuku (a form of ritual suicide).
These are just a few tokens mentioned by Casey. Leo, the founder of Runestone, has also endorsed several tokens, such as ORDINALS•ARE•DEAD and CASEYS•MOM•HAS•GOT•IT•GOING•ON, among others. Interested individuals can explore further by checking their tweets. However, due to their excessive endorsements, most of these tokens have performed average, so it’s just a direction for finding tokens.
Community-led tokens:
BITCOIN•PEPE•MATRIX: A Pepe concept token, using magical Pepe memes and the 69 420 concept mentioned by Musk, attracting attention from many people. The endorsing artist has previously created a Rare Pepes series.
Currently, there are almost no tokens led by the community, so I will only mention one here.
05
Conclusion
The above is an introduction to Runes. It can be seen that the development of Runes is still in its early stages, as indicated by the recent high transaction fees on the Bitcoin blockchain. However, as a mainstream narrative in the current bull market, the Bitcoin ecosystem is still worth paying attention to.
Perhaps the wind will change direction in a while, and players who are active on the blockchain should maintain an open mindset towards new things. However, it is important to be cautious due to the high transaction fees, as many people have been “buried” in such projects.
