Author: Jaleel
The assets are numerous and chaotic, and the Runes ecosystem is in the Cambrian period.
In the week before the halving, the overall market of the crypto was not very good, but the Bitcoin ecosystem has become more active since entering April, with Gas rising, showing a strong trend of the rise of the third wave of Bitcoin. In particular, during the launch of the Runes protocol on the mainnet, the community was enthusiastic and actively prepared for the minting of wallets, UTXO splitting, and testing the entire minting process, hoping to seize the initiative.
However, with the launch of the Runes mainnet after the Bitcoin halving, project owners rushed to grab the first few runes, causing the Gas price to soar to an incredible height. With such a high casting cost, most people chose to wait and see, while the prices of the previously rushed rune concept NFTs, such as Runestone and RSIC, have been falling all the way. "I don't know what to buy, I don't know what to play", has become the voice of these well-prepared community members, and the market seems a little confused.
“We are in a relatively chaotic and confused period, and there is no broad consensus yet.” BTC ecosystem observer and player 0xSea said this in an interview with BlockBeats, which truly reflects the current status of the Runes ecosystem.
Expected to be full but caused controversy
Looking back at the previous coin issuance protocols in the Bitcoin ecosystem, from Brc20's ORDI to Arc20's ATOM, the popularity and liquidity of the entire protocol are driven by the protocol's first asset. "First is First" has always been the slogan of the Bitcoin ecosystem, so the leader is generally the first coin deployed in the protocol. However, on Runes, this investment theorem was temporarily invalidated.
Casey hard-coded his own rune number 0, "UNCOMMON•GOODS", in the Runes protocol. This rune was written directly into the code. Starting from Bitcoin block height 840,000, this "Genesis Rune" can be minted in unlimited quantities, one per transaction, and its minting window will last for four years until the next Bitcoin halving. During these four years, although the number of "UNCOMMON•GOODS" continued to increase, its market value decreased due to dilution, thus the Genesis Rune and the Runes protocol were deeply bound together.
"From this mechanism, we can see that Casey hopes that Genesis Runes and Runes Protocol will be a game that can be played for at least four years," 0xSea told BlockBeats.
Too many characters, no recognition
Veteran meme players place a lot of emphasis on recognizability, but the current length of the rune reduces the recognizability of the meme.
In Casey's Runes design, the length of the rune name is set to a maximum of 26 characters, a rule that actually reduces the recognition of the meme. It is worth noting that although Casey's hard-coded "UNCOMMON•GOODS" is not subject to this rule, the separator "•" is not counted in the total number of characters. This is to improve the recognition of the ticker, such as "WO•YAO•DISS•YOU".
The name of the current Runes asset
In short, after the "rune" is officially activated at block height 840,000, all 13-26 character tickers can be deployed immediately, but "ZZZZZZZZZZZZZ" is the first 12-character ticker that can be deployed. These 12-character tickers will be gradually unlocked between blocks 840,000 and 857,500, that is, every 17,500 blocks, a shorter 1-character ticker will be unlocked.
The next halving is expected to take place in February 2028, when the block height will reach 1,050,000. During the next halving, there will be a total of 210,000 blocks, which will be divided into approximately 12 update cycles, each containing approximately 17,500 blocks, which will be completed approximately every three to four months. Therefore, from now until the next halving, the number of ticker characters will decrease by one for every 17,500 blocks, until it is reduced to one character.
Therefore, for old players who are used to four-character tickers, such as $PEPE, they need to wait about three years to see the unlocking of such short tickers.
Sea believes that Casey designed this gradually decreasing ticker rule to allow the Runes protocol to continue to attract the attention of the industry and the community as the number of characters slowly decreases, thereby maintaining intermittent but lasting interest in Runes. "By 2027, when the ticker is reduced to the minimum number of digits, we expect to see a climax of attention."
Old players find Runes boring
“Old BRC20 players will feel that Runes has no innovation in the gameplay itself and is very boring.” Sea told BlockBeats: “Whether it is Fair Launch, airdrops, grabbing BRC20, or mining ARC20 based on hash POW, everyone has played it once, and Runes does not bring much novelty. In the absence of novelty, unless there is a clear wealth effect that can be foreseen, players’ interest may quickly fade and become weak.”
Although Runes has made some technical improvements - such as simplifying the two transactions originally required by BRC20 into one, thereby lowering the threshold and cost for players - this improvement has already been achieved by ARC20.
After comparing various protocols in the Bitcoin ecosystem, KOL scientist Box also believes that Runes has no major breakthrough in technology.
Baicai, an early OTC trader and market maker of Ordinals, was even more blunt in pointing out that “Casey borrowed the idea of the Atomicals protocol without mentioning it a word from beginning to end.”
On the emotional level, Sea agrees with Baicai's view that Runes' so-called innovation is actually very limited. It was mainly by relying on Casey's personal influence and catering to the Western community's sentiment of miss the pump that it was able to reap the fruits of victory of BRC-20 and Atomicals.
Sea believes that BRC-20 represents innovation from 0 to 1, although it is a bit crude; while Runes is the culmination of the optimization faction, mainly meeting the miss the pump of the Western community for BRC-20, but it does not bring paradigm innovation. In contrast, Atomicals represents a true paradigm innovation, not just a minor optimization. After all, when Arthur started writing Atomicals in February last year, BRC-20 had not yet been released.
Although Sea pointed out that the Runes protocol has limited innovation, he also believes that a protocol does not necessarily need to be innovative to become a "standard", and the market choice is the decisive factor. "In fact, just like Tencent in the Internet industry, many of the products it has made over the past decade are not original (including WeChat), but are optimization + micro-innovation."
What hype logic will Runes have?
Although the Runes protocol, which has been highly anticipated, has been controversial in terms of its innovation and protocol gameplay, for most users who come to the crypto, profit is the first priority. They don’t care how much innovation Runes has, but are more concerned about which Runes protocol targets are suitable for speculation.
Besides, there is more room for profit when there are disagreements. Although many leading Runes projects have not yet carried out airdrops, with the recent reduction in gas fees, most of the project parties' airdrops are already on the way. In addition to the old-fashioned Runestone and RSIC, what other hype logics will the Runes protocol have?
Runes may become the new favorite of swing traders
After the snapshot was completed at block 840,269, each user holding Runestone NFT received 889,806 DOG•GO•TO•THE•MOON (Rune No. 3). After the snapshot was completed, the floor price of Runestone dropped sharply to 0.032 BTC, a drop of 59.5% in 24 hours. As of writing, the floor price of Runestone has further dropped to 0.029 BTC.
Although the price of Runestone continues to fall, its airdropped Runes meme coin DOG has been on an upward trend since it was airdropped on April 24. According to Magic Eden data, the current unit price of DOG•GO•TO•THE•MOON is 7.79 sats, and the 24-hour trading volume is as high as 111 BTC, which is far superior to other Runes assets and temporarily ranks first in Runes.
At the same time, the total market value of DOG•GO•TO•THE•MOON has reached US$500 million, and the current market value of Runestone plus DOG is close to the historical high of Runestone.
After the airdrop, Runestone seems to be an empty shell, and part of its consensus liquidity has been transferred to DOG. Such a change raises a question: Does this "shell" still have value?
Sea commented: "The Runestone team has already considered this issue, so the founder Leonidas has been emphasizing that 3 tokens will be issued, and DOG is just one of them." The price has now fallen below $0.02 and may even fall below $0.01, as it does not seem to have much practical use in the short term. However, the situation may change in the coming months. If the project announces the details of the airdrop of the second token in October, this may re-attract the market's attention and drive the price up.
In this way, Runes may be one of the assets that is extremely suitable for trading in the Runes ecosystem. Of course, this still poses a certain test to the holders in terms of information acquisition and processing.
On the other hand, RSIC's price drop after the airdrop is smaller, which can be attributed to its stronger mining machine attributes. Unlike Runestone, RSIC takes snapshots according to the block time held. Even if it is sold, the previously held block time still belongs to the original holder. "Even if the details of RSIC's second season have not yet been announced, it is very likely that the blocks currently held are already being calculated," Sea told BlockBeats.
Degen Meme Culture in Bitcoin
To put it bluntly, the tokens on the Runes protocol are still memes. Therefore, in addition to Runes frontrunners such as Runestone and RSIC, there are many meme coins with Bitcoin native elements that are released in a completely fair manner, indicating huge alpha opportunities.
Fairness is one of the core values of meme. If a meme reserves too much for itself, the community will generally not support it. A true "fair launch" means that no funds are reserved for founders or early investors, ensuring that all participants have equal opportunities.
In addition, recognition is also a key factor in the success of a meme. For example, the puppets and wizards, which were highly recognizable on BRC-20, had seen a significant increase in market value before the launch of Runes. The runes they are deploying and airdropping are Rune No. 13 PUPS•WORLD•PEACE and Rune No. 17 MAGIC•INTERNET•MONEY. Another example is PEPE•WIT•HONKERS. Sea particularly appreciates the embodiment of the Pepe element in Runes. He mentioned that "the image of Pepe, from early comics to various emoticons widely circulated in the Internet community today, has a strong communication power and has reached an audience of millions or even tens of millions."
"And the ticker is Elsa, which was the only project I played on the first day of Runes' launch." Sea said. Elsa is the name of Bitcoin OG Hal Finney's dog. Hal Finney was the first trader on the Bitcoin network and went down in history because of the 10 BTC transferred to him by Satoshi Nakamoto. Hal Finney died of health problems in 2014, but his status in the community cannot be ignored, adding a deep historical significance to the related meme. After all, this is in the Bitcoin ecosystem, and if it has Bitcoin elements, it will naturally be more popular.
Hal Finney and his dog, source network
In addition, the epic Bitcoin NFT project Blob, which won the Bitcoin fourth halving block with 33.3 BTC from ViaBTC, is also worth paying attention to. Its elements such as laser eyes, rare satoshis, and halving all represent the pure elements of Bitcoin.
According to Magic Eden data, Blob's floor price rose by more than 55% in 24 hours, reaching 0.0543 BTC.
Recently, @Elocremarc, the co-founder of the Bitcoin NFT project Blob and the current 6th-ranked contributor to the Ordinals protocol, is currently developing "recursive runes". It is expected that Blob will also take action in the rune ecosystem in the future.
In the communication with BlockBeats, Sea also expressed its expectations for Blob in the Runes ecosystem: "If Blob issues coins in the future and operates well, I think it will be an excellent meme. After all, the current Runes memes are still a little bit lacking. But this is just my guess. I guess the probability of Blob issuing coins may be 30%."
Will Runes also have a product narrative?
In the early days, most people’s impression of the Bitcoin ecosystem was all memes, but after a year of development, the market has more things, including Bitcoin Layer 2 and lending.
Runes will be the same, initially it seems to be only related to memes, but as time goes by, especially in a year, it is definitely more than just a meme. BlockBeats also observed that there are already Bitcoin lending protocols preheating on Runes.
A prominent example is Shell Finance, a trustless lending protocol built on Bitcoin Layer 1. With the help of PSBT and DLC technology, Shell Finance implements a lending and liquidation process in a trustless environment. This protocol consists of two core modules: one is the synthetic stablecoin asset $BTCx, which is anchored to the value of $BTC and issued; the other is a lending protocol that supports the use of a variety of inscription assets (including Ordinals, Runes, Atomicals, Stamps, etc.) as collateral to lend $BTCx.
Currently, Shell Finance is distributing its own NFT, the Darkman whitelist, in various NFT asset communities on Bitcoin, and Darkman holders will also have the opportunity to receive airdrops of Runes tokens issued by Shell Finance in the future.
In the communication with BlockBeats, Shell Finance revealed that they will use the token launch on the Runes protocol to complete the construction of the community core and the cold start of the product and liquidity.
"Our approach is this: we choose to conduct functional testing (FT) first, because we are a lending project that focuses on actual landing. For a lending project, we mainly need two things: first, qualified users; second, necessary liquidity. In order to let potential users know about us, we did not carry out large-scale promotion in Q2, but adopted a productized mechanism by taking asset snapshots for specific asset holders. Therefore, users who hold our FT are actually active users of these assets and are also our target users in the future." Shell Finance explained their market strategy and product positioning.
When Shell Finance's main product (MP) was launched, they actually built the core of the community. This strategy is not only to build a solid user base, but also to ensure the sustainability of product development and long-term participation in the market.
In addition to the three types of Runes protocol hype logic mentioned above (band runes, Bitcoin degen memes, and long-term product narratives), there are some consensus opportunities in the market, including what 0xWizard said, "ordinals OG-launched projects; well-known projects from ETH or other chains, such as Prometheus; projects that can introduce Solana liquidity in the future." I won’t go into details about these.
At present, after the Runestone airdrop, Runestone and its airdropped DOG•GO•TO•THE•MOON are still the top of the list in terms of liquidity and floor price, but in the long run, there is a possibility that they will be overtaken. BlockBeats will also continue to track the subsequent development of the Runes protocol.
