First Runes-based blockchain
Last updated
Last updated
is the latest fungible token protocol released in September 2023 to hit the Bitcoin ecosystem, with promises of simplicity and efficiency.
Proposed by Casey Rodarmor (also creator of the Ordinals protocol), Runes is a proposed protocol for issuing fungible tokens directly on the Bitcoin blockchain. This means you could create and manage tokens that are interchangeable and divisible directly within the Bitcoin network, similar to how ERC-20 tokens work on Ethereum.
Distinguishing itself from other fungible token protocols for Bitcoin, Runes sets itself apart by eliminating the need for off-chain data or a native token. Instead, Runes encodes token data directly into specific UTXOs (Unspent Transaction Outputs), uniquely marked as 'Rune-bearing.' Essential token details, including supply, issuer information, and metadata, are succinctly stored in compact ‘OP_RETURN’ outputs attached to the Rune-bearing UTXO. When a Rune-bearing UTXO is spent, both the Bitcoin value and the associated token are seamlessly transferred, with the recipient validating the token's legitimacy and updating their ledger accordingly.
- SIMPLICITY
Runes leverages the existing Bitcoin infrastructure to uphold its core principles while minimizing complexity. In contrast to Ordinals, Runes addresses concerns about blockchain size and transaction fees by directly attaching token information to existing UTXOs, streamlining data bloat.
- EFFICENCY:
By cleverly utilizing UTXOs for token management, the Runes protocol optimizes transaction processing, presenting a potential improvement in scalability when compared to wrapping Bitcoin in tokens on other chains.
- INTEROPERABILITY:
Runes protocol seamlessly integrates with existing Bitcoin wallets and tools, embodying a commitment to user-friendly design. This integration not only minimizes user friction but also ensures that users can effortlessly incorporate Runes into their existing Bitcoin-related activities, fostering widespread adoption.
UTXO-based
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Ordinals Theory-based
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✔
Token Type
Fungible
Fungible
On-chain Footprint
Minimal
High
Lightning-Compatible
✔
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