Bitcoin halving is almost here. This is mostly interesting as it slows down Bitcoin issuance and reduces block rewards to 3.125 BTC, but some people are excited about this because of Runes.
Runes is a new protocol from Bitcoin developer Casey Rodarmor of Ordinals. While the basic idea of Ordinals focused on bringing non-fungibility to Bitcoin by distinguishing specific Satoshis based on the order in which they were issued, the BRC-20 token standard also emerged, helping to issue new fungible tokens on the network. .
Runes is similar to BRC-20 in that its goal is to enable new tokens to be traded on Bitcoin, but unlike BRC-20, Runes uses an unspent transaction output (UTXO) model. Basically, Runes is considered a more efficient implementation of token issuance designed to impose network disruption.
Rodarmor announced Runes in September 2023, giving people plenty of time to get excited. Given the success of BRC-20, it’s no surprise that many people are convinced that Runes has the potential to become the next big thing. Last January, OKX announced that it would support Runes across its wallet and marketplace.
According to CryptoSlam, there has already been a lot of success in the rune prediction market, with PUPS tokens, currently BRC-20, recording daily trading volumes of several million dollars this month. This was the second largest NFT/BRC-20 collection in the last seven days. Each BRC-20 PUPS token will have ownership of a PUPS Runes token, which will be converted when Runes are released.
The PUPS project emphasizes on its website that they are just memecoins. Considering that memecoins are very popular right now, this may explain why they are attracting so much attention.
All this Rune hype activity has naturally led to an increase in Bitcoin’s transaction fees. The seven-day moving average of the network’s average transaction fee has risen from $4.11 earlier this month to $12.17 currently.
While this is still lower than the highs seen in December during Ordinals’ hype period, this jump was enough to push Bitcoin’s fees higher than those of Ethereum. Ethereum fees have continued to fall as cheaper Layer 1 and network expansion have drawn a lot of activity to what was once the de facto DeFi blockchain.
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