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The Runes protocol launches on Bitcoin, driving up fees as users rush to mint tokens
Despite this being the most anticipated Bitcoin halving so far (at least second Google search history), it was the launch of high-profile Bitcoin builder Casey Rodamor’s latest creation – Runes – that turned heads, even among longtime blockchain developers who despise digital tokens that can be minted on the platform.
Rodamor is known for releasing Ordinals, a protocol that allows people to “write” data onto the smallest units of bitcoin (i.e. satoshis) to create highly valuable assets on Bitcoin. Ordinals is widely credited with inspiring a renewed developer ecosystem on Bitcoin.
Runes are similar to ordinals, in that they allow people to “engrave” and mint tokens on the chain – the main difference is that ordinals are “non-fungible” (i.e. unique) while runes will. they work more like meme coinswhich have recently taken the cryptocurrency markets by storm.
The first Runes project to mint was Rodamor’s UNCOMMON•GOODS project, which was announced well in advance of the halving, as were many of the projects seeking to impact these coveted satoshis.
It is impossible to know in advance, however, what other projects could find space on these scarce satoshis. There are literally some already hundreds of Runes blueprints which are currently being minted and looking for potential buyers.
About nine blocks after the halving, the Runes miners had already paid up 78.6 BTC in fees (~$4.95 million) to purchase the rarest of the rare. This suggests that, like Ordinals, the Runes protocol could be a boon to Bitcoin’s thriving fee economy.
What makes a Runes project potentially viable is a subjective measure: being one of the first projects to be listed, like DOG•GO•TO•THE•MOON, which has the honor of being “Rune number 3” – it’s a measure. But buyers also judge projects based on the “quality” of their title.
A number of Runes projects were already starting to mint before the halving occurred, including DOG•DOG•DOG•DOG•DOG, MEME•ECONOMICS, SHORT•THE•WORLD, and PEPE•WIT•HONKERS, including dozens of others, second runebtc.xyz.
Before the halved block was mined, potential buyers in a X Space hosted by Leonidasa valued collector of Ordinals, users and speculators were debating which runes to mint and trading ticker names.
Among the names dropped were Taproot Wizards, the Ordinals project co-created by Bitcoin OG influencers Eric Wall and Udi Wertheimer, and a project called Satoshi Nakamoto, named after Bitcoin’s creator, who at the time of this writing was finished 5,000 owners which minted approximately 19,000 tokens.
It is difficult to judge which projects will actually prove to have long-term value.
“Yeah, I don’t see any interesting memes, I mean, I’m just trying to figure it out,” one trader said. “To be honest, I haven’t minted anything yet.”
“I’m trying to understand space in general right now,” someone else responded. “These projects are like the first Runes. Do you guys think these will actually be the most valuable ones?
“I think it depends on what happens to them,” someone responded.
Another thing to consider: how many tokens have been “pre-mined” or held in reserve for project creators to potentially release to the market at a later time. Prior to the halving, Leonidas had shared guidelines suggesting that projects pre-mining more than 10% of the token supply were “greedy.”
“I think the pre-mines are going to be the ones that win,” one trader said. “Why is it so hard to find a good meme with a 13 character limit,” he said, referring to the hard-coded naming system that Rodamor added to Runes to try to prevent “ticker squatters.”
Over time, rune tickers may be listed with shorter names. Within three years, for example, there could be Runes projects with three-letter tickers.
Although it is not clear how this strategy will work. According to the data source I ordera forward-thinking developer has already locked down a number of tickers, including ZZZZ (which will be the “first four-letter rune” to be minted in two years), ZZ and Z (the first two-letter and one-letter runes to be minted in three years ) and A (the last single runic character minted in four years).
In other words, with something so new, it’s difficult to determine what to value.
“While everyone is scrambling to figure out what the hell is going on, I just want to take a moment to say it’s great to be here with all of you,” Leonidas told his audience. “This is essentially the start of a new protocol that started about 30 minutes ago. So let’s see what happens. I think it’s going to be very chaotic.”