What Are Runes?
Created to enhance Bitcoin’s ecosystem, runes are designed for greater efficiency, flexibility, and wallet compatibility compared to their predecessors, the BRC 20 tokens.
The History Behind Runes
Runes evolved from the ordinals protocol initiated by developer Cassie Rmore in January 2023, which allowed for on-chain NFTs on Bitcoin. This quickly led to the creation of BRC-20 tokens by a different developer known as Domo.
Despite the complexities and criticisms of BRC-20s, the concept captured enough market attention and early buyers saw significant profits. This set the stage for the runes protocol, which is remarkably “simpler, more efficient, and much more flexible.”
Features of Runes
The naming conventions for runes are unique and potentially confusing. Tokens have long names with dots separating words, and names must contain at least 13 characters, reducing by one every 17,500 blocks.
Tokens are often referred to by more conventional ticker names, like “Dog” for dog.dogo.to.the.moon. Additionally, runes are numbered according to the order they were created, such as “Rune number two” for the token decentralized.
Why Now Might Be a Good Time to Buy
Lark Davis notes, “Runes have not yet broken the $1 billion market cap.” Despite waning hype after the Bitcoin halving, active communities and ongoing projects suggest the potential for future gains. Historical trends from ordinals and BRC-20 tokens show that early slumps can precede significant returns.
Interestingly, the top Rune token “Dog” has a market cap of just under $200 million, compared to Dogecoin’s $21 billion, indicating room for growth.
Top Runes Projects
Several runes projects are gaining traction:
- Dog to the Moon (Dog): “Has been the highest-profile Rune out there right now,” and makes a point about having no insider allocations.
- Pups World (Pups): Started as a BRC-20 token and has a loyal community with a “slightly cult-like quality.”
- Rune Coin (RSI): Listed on the OKX exchange, it has substantial liquidity and a strong partnership with Memeland NFT project.
- Lobo: Created by buoyant Capital and involved in early airdrops to runestone holders.
- Magic Internet Money (WZRD): Originally a BRC-20 token with plans to migrate to runes.
How to Buy Runes
For those interested in purchasing, here are some steps:
- Use wallets like Xverse and UniSat.
- To use OKX, you’ll need to set up their wallet.
- Check marketplaces like Magic Eden for airdrops.
- Consider platforms like Luminex for brand new runes.
Risks and Obstacles
“While being early to a new protocol can be very exciting,” it comes with significant risks. Issues like transaction friction and the experimental nature of runes mean investors need to be cautious.
Trading runes involves certain challenges, such as fixed batch trading and selecting from seller-defined token amounts. Additionally, there is the ultimate risk: “What if runes simply fade into crypto history in complete irrelevance?”