Runes Protocol: Introduction of a new token standard in Bitcoin

Profit was the main appeal of becoming a miner in the Bitcoin (BTC) blockchain. However, the latest halving on 19th April 2024 dropped rewards to 3.125 BTC per block. It barely covers the costs of maintaining mining grids and miners would be forced to shut. To address this, Rune Protocol introduced a new token standard to make mining more profitable again.

Key takeaways

• Runes Protocol is a layer-2 token standard built on the Bitcoin blockchain
• It creates Rune tokens from Bitcoin’s junk UTXO 
• Transactions using Runes Protocol are paid in BTC, giving its miners big revenue
• You can mint, etch, buy, and sell Rune tokens

The Runes Protocol was released on 20th April, right after the Bitcoin halving, giving miners a timely saviour when they needed support. It introduces a new token standard to positively change transaction revenue for miners by minting speculative Rune Tokens on the blockchain network. 

What is Runes Protocol as a feature?

Runes Protocol is a layer-2 built to make a new token standard on the Bitcoin layer-1 network. The token it mints is called the ‘Runes token’ or simply ‘Runes’. It’s fungible like the BTC and also volatile with a forecasted 100x potential growth by 2025. For now, it is considered a meme coin or a ‘cheap coin’ even though it’s already trading at 6.42 Tether (USDT). 

The world became interested in the Runes Protocol as soon as it appeared because of its impact on miners’ revenue. The month of March saw a 3 BTC average transaction fees which is a relatively good rate for the network’s usual activities. However, this posed a problem for miners on 19th April when the halving occurred because it meant less revenue. 

The Runes Protocol saved the day, as Runes were minted on every transaction that day. It generated a collective total of 128.45 BTC in daily transaction fees for miners in one day. That was worth 89.8 million in USDT, a staggering 2,645% increase from March’s average, signalling a promising future for Bitcoin miners and the network they maintain. 

Magnify your crypto by playing Gamdom Crash

Casey Rodarmor: The genius behind Runes Protocol

Casey Rodarmor created the Runes Protocol to ensure Bitcoin’s continued profitability. This isn’t his only notable creation on the network as he is known for many other projects. According to Casey, Runes is also not his best idea, but it’s potentially the most promising. One of Casey’s most notable creations is the Ordinals, a layer-2 token standard designed to make non-fungible inscriptions on Bitcoin’s Satoshi denomination. 

Ordinals is his answer to creating a better version of Ethereum’s non-fungible tokens (NFTs) and it was responsible for miners’ all-time high revenue of 30 BTC daily fees in 2023. That is easily succeeded by Rune tokens’ 128.45 BTC on 20th April which is why many consider the Rune Protocol the successor of Casey’s Ordinals. 

Elements that make Runes unique 

The Runes Protocol uses the Unspent Transaction Output (UTXO) model, which determines the start and end of a transaction in Bitcoin and many other crypto circulating a blockchain. This makes Runes safer from reorganisations, making it less likely to be affected negatively by changes in transaction history. 

The issue with this model is how it creates junk UTXO after every transaction. Runes Protocol finds more uses for these junks by etching them into Rune tokens. Additionally, you can create different kinds of Rune tokens with unique properties like how much it’s worth and how many will circulate.

Even with unique types of Runes, they can all be used in a single transaction. For example, transferring 1 BTC worth of Runes can contain a combination of different Runes. These work similarly to how a United States dollar can be split into quarters, dimes, nickels, and pennies. Therefore, it is a token standard that repurposes UTXO, preventing junk data from cluttering the blockchain. 

The main advantages Runes promises to Bitcoin

Casey Rodarmor created Runes Protocol with a single purpose only: to enhance the Bitcoin ecosystem by providing speculative trading opportunities. It is fully intended to attract spot traders to bring more activities to the network either by being exchanged frequently on marketplaces or inviting more miners. Here are the main advantages Runes Protocol Bitcoin is bringing to the network and what it means for the future of crypto:

Alternative fungible token to use without leaving Bitcoin

BTC miners and traders can easily expand their portfolio to include Runes because they operate on the same infrastructure. That means requiring no further investments in establishing a new mining rig or setting up a different wallet to store it. Likewise, exchanges already trading BTC can easily support Runes. 

Runes also offer simpler operations that do not depend on complex procedures. It features the same peer-to-peer (P2P) payment systems BTC was known for, but without needing additional layer-2 protocols or channels for better efficiency. The Runes Protocol is already faster and more scalable than Bitcoin. 

Trading Runes increases fee revenue for Bitcoin

Any activities with Runes like selling, sending, or receiving have transaction fees. These charges are paid in BTC rather than Runes, meaning that validators (miners) receive Bitcoin as payment for their hash rate. It’s a minor detail on paper but a significant factor in what’s going to happen if this token standard becomes popular worldwide. 

Remember that Runes is still cheap and volatile, with a chance for exponential growth. Exchanges like UniSat, Binance, and Gate.io are already well-known hubs for the asset and are getting strong liquidity from their users. It is expected to be supported in more secondary marketplaces and blow up in liquidity, increasing transactions to validate on Bitcoin. 

Guess the outcome and win Bitcoin by playing Gamdom Dice

How to participate in the Runes Protocol ecosystem

There are multiple paths to becoming an investor in the Rune Protocol, including minting, etching, and spot trading. Here’s how to get started with it as a newcomer to its ecosystem so that you can join the upward trend of Bitcoin’s new token standard. 

Set up any wallet for Bitcoin

The first step to investing in crypto is to have a wallet where you can store it. Among the most popular are UniSat Wallet, Xverse Wallet, and Orange Wallet. Each one is compatible with the Runes Protocol because they were originally built to support other Bitcoin assets that use the same infrastructure.

All three wallets were created to hold, manage, and earn Bitcoin-based tokens (BRC-20) and Ordinals. With the arrival of Runes, they can interact with its protocol like minting and etching. They can also interact with decentralised applications (Dapps) to expand their uses and link with offline storage like Ledger for additional security. 

Invest in Bitcoin to store in your wallet

Transactions within the Bitcoin Runes Protocol are paid using BTC. This means you will need the world’s most valuable asset in your wallet. However, you don’t necessarily need to have a full 1 BTC. You can use your Gamdom winnings or leftovers from previous deposits in your venture. Withdraw BTC when you’re trading, minting, or etching Runes to have more ways to use your Gamdom prizes besides spot trading.

Mint or etch runes

Minting runes involves using the Bitcoin launchpad platform for Runes. Luminex is currently the most popular and it is highly recommended for newcomers to the ecosystem. It offers launchpad services to Runes and Ordinals alike but you just need the tools for Runes in this scenario.

Launchpads are like exchanges where you have a wallet upon signing up or link an existing wallet for seamless asset management. Once set up, you can start using the mint or etch services. 

Minting requires BTC to pay for the process. You have two options namely pre-split and auto-split. Pre-splitting is faster because it splits your UTXO beforehand but it’s more expensive and requires your full attention. Auto-splitting splits your UTXO in real time which takes longer but the transaction fee is cheaper and a hands-off process. 

Etching is all about making your Runes whereas Luminex can give you wide parameters for customisation. It includes your Rune ticker, decimals and max supply, and limit per mint. You can also decide on its symbol using a character and upload an image to use as a logo. 

Buy and sell Runes

Buying and selling crypto is the fastest way to get your hands on assets and profits. You’ll need to participate in marketplaces that trade Runes to do so. They can pair Runes with popular assets for easy trading like BTC, Ether (ETH), USDT, and USD Coin (USDC) among others. 

There are centralised and decentralised options that you can go to. Centralised options include Binance and Gate.io, while decentralised platforms like UniSat and THORChain are also available. The process of making and taking orders for Rune tokens is similar to other crypto where you decide which asset to trade it for and which buyer or seller you wish to pair with. 

Look forward to Bitcoin’s growth 

Runes Protocol ensures that validators have large revenues in transaction fees post Bitcoin halving and traders participate more in its network. Its advantages bolster the BTC economy, benefiting all members of its ecosystem. This includes crypto bettors, especially, if you’re using BTC when playing at Gamdom. 

Join the crypto betting excitement at Gamdom