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The Rune Protocol is designed as a new way to mint alternative tokens on the Bitcoin network. Since its launch, 10,739 Rune tokens have been created. According to data from Runes Alpha, on April 23rd, daily transactions involving Runes on Bitcoin reached an all-time high. On that day, there were 802,977 transactions involving Runes. So far, 52,365 Rune transactions have been executed, bringing the total number of transactions since the fourth Bitcoin halving event on April 20th to 2,560,005.
Runes Occupy Space on the Bitcoin Network
According to a Dune Analytics dashboard prepared by Crypto Koryo, transactions involving Runes have consistently been the most significant transactions on the Bitcoin network since April 20th.
When the Runes protocol was launched, it accounted for 58% of all transactions completed on the Bitcoin network. On that day, transactions involving BTC sales accounted for 42%. On the other hand, transactions involving ordinary tokens on layer one networks and all other BRC-20 tokens combined accounted for only 0.7% of all completed network transactions.
Due to the surge in daily Rune transaction volume on April 23rd, its share of total Bitcoin network transactions that day rose to 78%.
According to data from Dune Analytics, transactions involving Runes on that day exceeded BTC sales transactions completed on the network by 45%.
Since its launch on April 20th, transactions involving Runes have accounted for 57% of all fees paid on the Bitcoin network, pushing the total blockchain fees to a record high of over $80 million.
On that day, the average transaction fee on the network reached a peak of $128, surpassing the peak of $30 during the initial surge in ordinary dividend interest.
As a result of the surge in Bitcoin network transaction fees, miner revenue has skyrocketed. Despite a 50% decrease in inflationary returns after the halving, this situation has occurred.
According to data from IntoTheBlock, miner revenue exceeded $100 million on the day of the halving.
In contrast, on April 20th, fees for processing BTC sales transactions accounted for only 38% of all fees on the network.
Reduction in New Engravings
The Rune protocol supports three types of transactions: engraving, minting, and transfer. Engraving allows users to create Rune tokens with set terms.
Through minting, users can mint previously engraved tokens and transfer them to different wallet addresses.
Despite the surge in daily Rune transaction volume, the number of new Runes created has steadily declined since the halving. On April 20th, the total number of engraved Rune tokens was 2,647.
However, since then, this number has been on a downward trend, with fewer than 1,000 new Runes created as of April 23rd. According to data from Runes Alpha, 10,739 Runes have been created since its release.
A New Way of Doing Things
In simple terms, the Rune protocol, created by Casey Rodmarmor, founder of Bitcoin Ordinals, is a new standard for directly creating alternative tokens on the Bitcoin blockchain.
In March 2023, anonymous developer Domo introduced the BRC-20 token standard, which first enabled the generation of alternative tokens on the Bitcoin network.
These assets became increasingly popular, reaching a market value of $1 billion by June of the same year. However, with the intensification of speculation around them, they often led to congestion on the Bitcoin network.
A large number of unused transaction outputs (UTXOs) were created, clogging the network.
For example, as mentioned earlier, on December 3rd, the number of BRC-20 tokens minted exceeded 450,000.
This led to severe congestion on the Bitcoin network, with over 267,000 transactions remaining pending for several hours before confirmation.
As a result, the network's mempool experienced a backlog. The surge in pending transactions led to the mempool reaching 1.54 GB, exceeding its capacity of 300 MB.
How Does It Work?
The Rune protocol essentially adopts Bitcoin's UTXO model and OP_RETURN opcode, a special instruction in network transactions.
When a new Rune token is created, it is attached to a specific UTXO.
Information about the token, such as its name, divisibility, symbol, minting terms, amount, etc., is stored in the UTXO using the OP_RETURN opcode in Bitcoin transactions.
This is done to mark the UTXO as carrying Rune information.
When a transaction is initiated to send Rune tokens, it essentially includes the sending UTXO, with its details encoded within it. |
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Post time 1-5-2024 12:48:54
