Original author: Nancy, PANews
Despite market expectations and the preheating of resources from all parties, the Runes protocol has not shown a strong money-making effect and out-of-the-box effect after being launched for many days, and various FUD and controversial voices about Runes have begun to be heard one after another. This article will interpret the controversy faced by the Rune track and analyze the current market performance of the Rune track from data.
Runes are under multiple doubts, and the market enthusiasm is said to be difficult to sustain
Rune Protocol is facing various controversies a few days after its launch. Factors including communication power, handling fees, fairness of asset issuance, etc. may make it difficult for this track to maintain its high popularity.
First of all, the cumbersome rune names are considered to undermine the MEME attribute of community dissemination, especially for participants in the Chinese community who are not good at English. According to the name rules of the Runes protocol, the rune name consists of letters from A to Z and must be between 1 and 28 characters long, but the name length is at least 13 letters in the first 4 months of the launch, and it will be reduced by 1 every four months thereafter, which means that it will take three to four years to achieve a simple token name. The rune number zero deployed by founder Casey will continue to be cast for four years until the next halving, and the outside world has also questioned whether its value has the ability to continue to support. However, many people believe that this design of the founding rune will be conducive to the long-term development of the rune ecosystem, rather than short-term speculation.
Secondly, the surge in fees brought by runes once caused congestion in the Bitcoin network, and even a Gas War phenomenon occurred. Not only did the user experience suffer due to the extension of transaction processing time and the increase in costs, but players were also prone to the risk of being buried. Not only that, the high gas fees required by many rune projects far exceeded their own value. The excessive participation cost not only dampened the enthusiasm of users, but also greatly reduced market liquidity. Some netizens described it this way, "I took 1,000 U to recharge runes and received 700 U. After deducting the handling fee, I had 500 U left after buying. Then the project fell and I wanted to sell it, but I found that the handling fee was not enough. I recharged 500 U again and received 300 U. In the end, I sold all 100 U, and there were still 3 U left when I mentioned it to the exchange, with a total investment of 1,500 U." This kind of ridicule also reveals to a certain extent that compared with participants with large capital volume, retail investors no longer have the cost advantage of seeking high returns after a series of links such as recharge and purchase.
"If inscriptions are a counterattack by retail investors against institutions, then runes belong to the institutional era." The fairness of rune participation has also been questioned by users. In the rune projects, there are more or less reservations, such as 99% of the total pre-mining of Z•Z•Z•Z•Z•FEHU•Z•Z•Z•Z•Z, 20% of SATOSHI•NAKAMOTO, and 20% of MEME•ECONOMICS. This behavior is considered by users to undermine the principle of fairness and justice. Institutions/projects have also spent a lot of money to snatch the right of retail investors to issue top-ranked runes, such as Z·Z·Z·Z·Z·FEHU·Z·Z··Z·Z spent 6.732 BTC (about 430,000 US dollars) to obtain the No. 1 rune.
In addition to the above reasons, many Pre-Runes gameplays harvested a large amount of liquidity in advance, the market heat and expected over-consumption under the "hottest must die" principle, and the sequelae of losses under the inscription hype craze are also important factors.
In addition, there are various doubts about Runes' technology in the market. For example, KOL @白菜 posted that Casey lacks basic respect for BRC 20 and its creator domo, who brought Ordinals to the forefront. While enjoying the aura and traffic brought by BRC 20, he hates the standard very much. At the same time, he borrowed the idea of the UTXO-base protocol from Atomicals to create Runes, but never mentioned it. What blockchain needs more is financial narrative. The asset issuance story of BRC 20 has been told very well, while Runes has no scalability and is not compatible with bitvm, so its scope of application will be greatly limited. However, the Runes market is realizing innovative updates in technology. For example, the launch of the rune batch casting function can greatly reduce the handling fee.
In fact, there are many voices in the market that are "bullish" on the Runes protocol. For example, analysts at research and brokerage firm Bernstein said that the Bitcoin network, driven by the newly born Runes token standard, has set historical highs in daily miner rewards and transaction fees. The network is currently experiencing a "DeFi Summer" moment, and over time, users can see more utility-based tokens on Bitcoin.
Contributed to two-thirds of Bitcoin trading volume within 5 days of launch, and only 3 Rune projects had a market value of over 100 million
Despite the criticism of the Runes protocol in the market, it still dominates Bitcoin transactions in the near future.
According to Dune data, since the Bitcoin halving event on April 20, the Bitcoin network has processed more than 2.61 million Runes transactions in the past 5 days, accounting for 65% of all Bitcoin transactions since its launch on April 20, far exceeding the number of transactions for ordinary Bitcoin peer-to-peer transactions, BRC-20 and Ordinals. However, although the daily transaction volume of Runes peaked at more than 750,000 on April 23, it has been declining since then, which also shows that the popularity of Runes has shown a clear downward trend.
At the same time, Dune data shows that Runes transactions contributed more than 1,500 BTC in miner fees within 5 days of going online, of which 69.5% of the fees were contributed on the day of going online, but there was a significant decline in the following days, basically maintaining between 18% and 49%.
Data from the OKX Web3 Rune section shows that as of April 26, there have been more than 11,000 Rune projects issued in the market, of which 50 are relatively popular. According to the statistics of the top 10 Rune projects by market value compiled by PANews , among the many Rune projects, only the No. 1 symbol Z•Z•Z•Z•Z•FEHU•Z•Z•Z•Z•Z, the No. 3 symbol DOG•GO•TO•THE•MOON, and the No. 8 Rune RSIC•GENESIS•RUNE have a market value of over 100 million, while the market value of most projects is less than 50 million US dollars.
Judging from the intraday price increase, the average decline of these runes was -20.07%. Among them, DOG•GO•TO•THE•MOON, MEME•ECONOMICS, Z•Z•Z•Z•Z•FEHU•Z•Z•Z•Z•Z and RSIC•GENESIS•RUNE performed relatively well, especially the Runestone airdrop project DOG•GO•TO•THE•MOON, which increased by 44% within the day, while LOBO•THE•WOLF•PUP, THE•RUNIX•TOKEN and RUNE•ALPHA•COOK fell more significantly;
At the same time, from the perspective of the number of holding addresses, there are 6 projects with more than 10,000 holders, of which DOG•GO•TO•THE•MOON and LOBO•THE•WOLF•PUP have more than 70,000. From the perspective of the change in the number of addresses within the day, these rune projects have fallen by an average of 25.69% in the past 24 hours. Only RUNE•ALPHA•COOK, DOG•GO•TO•THE•MOON and RSIC•GENESIS•RUNE have performed relatively stable. Z•Z•Z•Z•Z•FEHU•Z•Z•Z•Z•Z, SATOSHI•NAKAMOTO, ANARCHO•CATBUS and MEME•ECONOMICS have experienced a large loss of holding addresses, with a general decline of more than 40%;
In addition, judging from the daily trading volume, market liquidity seems to be highly concentrated on DOG•GO•TO•THE•MOON, whose daily trading volume accounts for over 90.6% of the total. The vast majority of rune projects only have transactions of hundreds of thousands, and some even only have transactions of tens of thousands of dollars.
From this point of view, although there are quite a few rune projects in the current market, the head effect is very obvious and shows a trend of significant cooling. At the same time, the scale of participation in the rune market is limited and players are still mainly paper players. Miners, new listing platforms and exchanges may become the biggest winners. For runes in the early stages of development, if they want to grasp the traffic dividend, the continuous iteration and update of functions and technologies, the improvement of infrastructure and a fairer and more open gameplay will be the key points.
