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How to understand the innovative value and potential subsequent market impact of Runes? In my opinion, Runes is a set of FT token issuance standards based on the Ordinals protocol, which will become the foundation for the issuance of assets in the BTC network in the future, enabling the development of a vast ecosystem. If we consider the pre-halving period of standards like BRC20, ARC20, SRC20, etc., as a "chaotic era," the Runes standard will propel the BTC ecosystem into a "constant era" of development. Here's my understanding:
1) Ordinals is a protocol based on the BTC network for issuing and transferring various encrypted assets through off-chain indexing. Initially more suited for NFT types of assets, the emergence of the Rune standard fills the gap in managing the issuance of FT homogeneous token assets, truly helping it become a protocol for issuing and managing BTC-derived encrypted assets.
2) After Ordinals, a series of derivative innovative standards such as BRC20, ARC20, SRC20, etc., were born, all focusing on the Script script space in UTXO, aiming to achieve the issuance of FT homogeneous assets on BTC.
BRC20, as the pioneering token standard, achieved asset issuance by placing data in the Witness Segregated Witness and managing assets through subsequent collaboration between Ordinals and other multiple indexers. ARC20 is a derivative improved token standard, favored by the technical community for its simple colored coin transfer model and Bitwork's POW mining paradigm, but its reliance on segregated witness for data storage is not perfect, and subsequent token splits have encountered some troubles. SRC20 directly embeds original data in UTXO transactions in stamp code form, eliminating the need for third-party indexers to achieve asset issuance and management.
The above three types of token issuance standards each have their own advantages and disadvantages: BRC20, although appearing early with strong consensus, may cause UTXO set inflation and long-term harm to the BTC network under market FOMO sentiment. ARC20 is favored by the technical community for its simple colored coin transfer model and Bitwork's POW mining paradigm, but its reliance on segregated witness for data storage is not perfect, and subsequent token splits have encountered some troubles. SRC20, although it can be independent of indexers, does not solve the problem of dust created in the BTC network by its own data storage.
3) As everyone can see, this chaotic era of various standards competing lasted for a long time. Casey, the founder of Ordinals, proposed the Runes new standard to solve this problem. The innovation points are as follows:
1. Introducing the OP_RETURN Bitcoin script opcode, which can mark and store non-payment-related arbitrary data, fundamentally solving the problem of UTXO dust;
2. Adopting the asset transfer characteristics of dominant UTXO models such as ARC20, allowing users to transfer derived encrypted assets by transferring UTXO.
OP_RETURN acts as a Blob space on the Ethereum layer2 application, effectively recording data but not being executed by full nodes. Through the marking of OP_RETURN, the Ordinals protocol can manage and account for data according to the transfer direction of UTXO, which can well achieve asset splitting and avoid asset loss issues. How to achieve asset splitting? For example, if Alice has 10 Rune tokens and now wants to send 2 Rune tokens to Bob:
1. Alice initiates a regular transaction transfer on the chain and specifies Bob's address as the receiving address;
2. The wallet or asset management platform will initiate a transaction and mark 2 tokens to Bob through OP_RETURN, and the remaining 8 tokens will be transferred to Alice's change address (in fact, there are two transactions for token transfer);
(The reason for the existence of burned assets in ARC20 lies here. If the user does not specify the change address, the default assets will "disappear" together with UTXO and be transferred to the miner)
3. The Ordinals protocol indexes the data and finds that OP_RETURN records the request to transfer 2 tokens, giving Bob's address +2 and Alice's new address +8, completing the asset splitting and transfer management.
4) It is not difficult to see that the Runes standard adopts the strengths of various standards and fundamentally solves the problem of UTXO inflation. The key is that the Runes standard, combined with the Ordinals protocol, can achieve the unity of FT and NFT asset issuance, further consolidating the foundation of the Ordinals protocol.
In layman's terms, the Runes standard is actually a set of FT token standards subsidiary to the Ordinals protocol. Its combination with Ordinals will introduce a healthy and foundational asset issuance and management method to the BTC market. Runes discards the defects of BRC20's excessive reliance on indexers and leverages the transfer capabilities of UTXO itself to assist marking, thereby realizing a method of asset issuance close to BTC's native issuance.
It has all the advantages of other standards and none of the drawbacks that other standards cannot solve. Unless you insist on questioning the credibility of the Ordinals protocol, otherwise, Ordinals + Rune will definitely be the "perfect" issuance paradigm for current BTC derivative assets.
5) In the short
term, the combination of Runes and Ordinals will impact standards such as BRC20, ARC20, SRC20, etc., as it possesses comprehensive consensus, technological advantages, and long-term stability. Other standards will be directly impacted, drawing away a considerable amount of attention and followers.
However, this is by no means a complete replacement. If you are still concerned about ARC20, there is still the possibility of its stunning development in the future. In my opinion, Ordinals can be regarded as an indexer or a layer2 indexing chain, to some extent, competing with the CKB chain @NervosNetwork, which has isomorphic binding properties. Although the consensus of the Ordinals protocol is powerful, it cannot prevent the birth and growth of other protocols that coexist with it. (If you still insist on basing on Ordinals but try to outperform Runes with "standard" differentiation innovation, then just save it.
6) The emergence of the Runes standard has astonishingly changed the market gameplay. The sky-high mining fees, premine mechanism, and a series of gameplay such as Runestone, RISC, and NFT airdrops make the entire BTC derivative asset market issuance more like the gameplay in the early NFT market. Some people say that it has changed the fundamentals of Fair Mint. Wrong, such token issuance standards driven by project parties with open and transparent distribution mechanisms, potential for subsequent empowerment development, and a continuously growing community foundation are the "healthy state". If an asset issuance can only create a FOMO wave, allowing a wave of people to get rich overnight but cannot generate any subsequent imagination space, its significance is very limited.
In conclusion, as I mentioned at the beginning, I hope the emergence of the Runes standard will usher in a "constant era" of development for the BTC ecosystem, and it seems to be off to a good start. I also hope that as a mainstream asset issuance paradigm, it can accelerate the BTC ecosystem from the speculative asset issuance stage to a stage of empowering layer2 development ecology.
Only the wealth-creating effect and subsequent collaborative operation of the BTC layer2 chain brought about by the Runes standard's asset issuance are the beginning of the BTC ecosystem's explosive growth. |
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Post time 29-4-2024 20:54:56