The Bitcoin community is optimistic about the development of Runes, leading to increased BTC transaction fees ahead of the halving event.
Runes Protocol's heat pushes Bitcoin fees up ahead of halving. Photo: Protos
Runes Protocol is a protocol for issuing fungible Token on the Bitcoin network created by Casey Rodarmor - founder of the famous Ordinals protocol. Runes was announced in September 2023 and is expected to be deployed on April 20 - coinciding with the Bitcoin halving event.
Since the birth of the Bitcoin network, there has only been one currency, BTC. Bitcoin's structure does not allow for the creation of additional Token . However, Ordinals has paved the way for the issuance of fungible Token, many protocols have been launched in 2023 such as BRC-20 , ARC-20, ORC-20 , ORC-CASH, SRC-20..
Like BRC-20, Runes also aims to issue new Token to be traded on the Bitcoin network. But unlike BRC-20, Runes does not have UTXO (Unspent Transaction Output). Therefore, the project is expected to bring a more efficient Token Issuance method for Bitcoin, reducing network congestion compared to BRC-20.
UTXO is the Token balance that the user owns after each transaction. Unlike Ethereum, where users can transfer individual Token , on the Bitcoin network, the number of Token is combined in each transaction, and the unused Token will become the balance and be transferred back to the wallet and reused. in the next transactions.
Recently, investment company Franklin Templeton stated that Runes Protocol will help Bitcoin catch up with Ethereum and Solana. Accordingly, Runes will bring many improvements, including no UTXO, no dependence on Off-Chain data, no additional Token costs, increased privacy and compatibility with the Lightning Network .
With the success of BRC-20, it's no surprise that the community expects Runes to become the industry's next big success. In January 2024, OKX announced it would support Runes on its wallet and exchange.
According to CryptoSlam, many BRC-20 Token increased in price due to the community's excitement over the heat of Rune. PUPS Token reached its largest volume ever with over 62 million USD on this April day. This is the second largest collection of BRC-20 Non-Fungible Token in the past week. Each PUPS Token will be convertible to PUPS Token on the Runes Protocol when the protocol launches.
Statistics on PUPS trading activity. Source: CryptoSlam (April 18, 2024)
PUPS once asserted on its website that the project is just memecoin. The fact that PUPS increased in price instead of other memecoins explains the appeal of Runes at the present time.
Also because of the Runes Protocol fever, Bitcoin transaction fees in April have also grown again. The 7-day moving Medium of Bitcoin's Medium transaction fee has increased from 4.11 USD in early April to 12, 17 USD at the present time.
7-day Medium volatility of Bitcoin (green) and Ethereum (pink) transaction fees. Source: The Block (April 18, 2024)
Although this number is still low compared to Bitcoin's December trading levels, it is still enough to push Bitcoin fees higher than Ethereum. ETH price has continued to decrease in recent times as the attention of investors and projects has shifted to the newly launched Layer 1 and Layer 2 .
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