The Runes ecosystem is in the Cambrian period with many assets and chaos.

In the week before the halving, the overall market situation in the currency circle didn’t perform very well. However, the Bitcoin ecosystem has become more popular since April, and Gas has risen, which is likely to bring in the rise of the third wave of Bitcoin. Especially when the Runes protocol was launched on the main network, the community was enthusiastic and actively prepared to mint wallets, split UTXOs, and test the entire minting process, hoping to seize the opportunity.

However, in conjunction with the launch of the Runes mainnet after the Bitcoin halving, project developers scrambled to grab the first few runes, causing the gas price to soar to incredible heights. With such high casting costs, most people have chosen to wait and see, while the prices of rune-concept NFTs that had previously taken the lead have been falling, such as Runestone and RSIC. “I don’t know what to buy, I don’t know how to invest” is the voice of these well-prepared community members, and there is a sense of confusion in the market.

“We are in a period of relative chaos and confusion, and no broad consensus has yet been formed.” BTC Ecological Observers and Players 0xSea said this in an interview with BlockBeats, which truly reflects the current status of the Runes ecosystem.

Have High Expectations but Arouse Controversy

Looking back at several currency issuance protocols before 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 Longyi assets. “First is First” has always been the slogan of the Bitcoin ecosystem, so the leader is usually the first coin deployed by the protocol. On Runes, however, this investment theorem briefly failed.

Casey hard-coded the No. 0 rune “UNCOMMON GOODS” he deployed in the Runes protocol, and this rune was written directly into the code. Starting from a Bitcoin block height 840,000, this “Genesis Rune” can be minted in an unlimited amount, one for each transaction, and its minting window will last four years until the next Bitcoin halving. In the past four years, although the number of “UNCOMMON GOODS” has continued to increase, its market value has declined due to dilution. As a result, the creation runes and the Runes protocol are deeply bound.

“As you can see from this mechanic, Casey wants Runes of Creation and Runes Protocol to be a game that can be played for at least four years.” 0xSea said to BlockBeats.

Lengthy Number of Characters & No Recognition

Old players of memes attach great importance to recognition, but the current length of runes has reduced the recognition of memes.

In Casey’s Runes design, rune names were limited to a maximum of 26 characters, a rule that actually made the meme less recognizable. It is worth noting that although Casey’s hard-coded “UNCOMMON·GOODS” is not subject to this rule, the “•” separator is not included in the total number of characters. This is to improve the recognition of tickers, such as “WO •YAO•DIS•YOU”.

The name of the current Runes asset

To put it simply, after the official activation of “Rune” at block height 840,000, all 13-26 character tickers can be deployed immediately, but “ZZZZZZZZZZZZ” 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, with shorter 1-character tickers unlocked every 17,500 blocks.

The next halving is expected in February 2028, when the block height reaches 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, completed approximately every three to four months. Therefore, in the four years between now and the next halving, the number of characters in the ticker will be reduced by one character every 17,500 blocks until it is reduced to one character.

Therefore, older players used to four characters, such as $PEPE will have to wait about three years to see such short tickers unlocked.

Related Reading: “Rune” is coming, and a war among the Ordinals is about to begin?

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 community as the number of characters slowly decreases, thereby maintaining intermittent but lasting interest in Runes. “By 2027, when tickers are reduced to a minimum number of digits, we expect to see a peak of attention.”

Veteran users find Runes boring

“Old users of BRC20 will feel that Runes lack innovation in the gameplay itself and is very boring.” Sea said to BlockBeats: “Whether it is Fair Launch, airdrops, grabbing BRC20, or mining ARC20 based on hashed POW, Runes doesn’t bring much freshness because everyone has played it all before. In the absence of new ideas, unless there is an obvious 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 in ARC20.

After comparing various protocols in the Bitcoin ecosystem, KOL scientist Box also believes that Runes has made no major technological breakthrough.

Ordinals’ early OTC merchant and market maker Baicai bluntly pointed out: “Casey borrowed ideas from the Atomics protocol without mentioning a word from beginning to end.”

On an emotional level, Sea agrees with Baicai that Runes’ so-called innovation is actually very limited. It mainly relies on Casey’s personal influence and catering to the Western community’s empty sentiment to win the fruits of BRC-20 and Atomics.

Sea believes that the BRC-20 represents an innovation from 0 to 1, despite its crudeness; And Runes is the master of optimization. It mainly meets the Western community’s demand for BRC-20 air travel. However, it did not bring about paradigm innovation. In contrast, Atomics represents a true paradigm innovation, not just a minor optimization. After all, when Arthur started writing Atomicals last February, the BRC-20 hadn’t even come out yet.

Although Sea noted that the innovation in the Runes protocol is limited, he also believes that for a protocol to become a “standard” does not necessarily require innovative breakthroughs. Market choice is the decisive factor. “Just like Tencent in the Internet industry, many of the products it has developed over the past decade or so are not original (including WeChat), but are optimization + micro-innovation.”

What kind of hype logic will there be for Runes?

Although this Runes protocol, which has raised expectations, has been subject to a lot of controversy in terms of its level of innovation and protocol gameplay, its profit is the priority for most users who come to the crypto circle. They don’t care about how much innovation Runes has but are more concerned about which Runes protocol targets are suitable for speculation.

Moreover, there is more room for profit if there are differences. Although many of the early Runes projects have not yet launched airdrops, with the recent reduction in gas fees, airdrops from most project parties are already on the way. In addition to the cliche Runestone and RSIC, what other hype logic does the Runes protocol have?

Runestones may become the new favourite of swing traders

After the snapshot was completed at block 840,269, each user holding a Runestone NFT received 889,806 DOG•GO•TO•THE•MOON (Rune No. 3). After the snapshot was completed, Runestone’s floor price dropped sharply to 0.032 BTC, a drop of 59.5% in 24 hours. At the time of writing, Runestone’s floor price has dropped further to 0.029 BTC.

While the price of Runestone continues to drop, its airdropped Runes meme coin DOG has been trending upward since its April 24 airdrop. According to data from Magic Eden, 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. It has crushed other Runes assets and temporarily ranked 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 and DOG is close to Runestone’s historical high.

After the airdrop, Runestone seems to be an empty shell after shelling, and part of its consensus liquidity has been transferred to DOG. Such changes raise a question: Does this “shell” still have value?

Sea commented: “The Runestone team has already considered this issue, so founder Leonidas has always emphasized that 3 tokens will be issued, and DOG is only one of them.” The price has now fallen below $0.02 and may even fall below $0.01 as it doesn’t appear to have much practical use in the short term. However, the situation may change in the coming months. If by October, the project announces the details of the airdrop of the second token, this may attract the market’s attention again and push the price upward.

From this point of view, runestones may be one of the assets in the current Runes ecosystem that is extremely suitable for swing trading. Of course, this still poses a certain test to the holders in information acquisition and processing methods.

On the other hand, RSIC’s smaller post-airdrop price drop can be attributed to its stronger miner attributes. Unlike Runestone, RSIC takes snapshots according to the block time held. Even if it is sold, the block time previously held still belongs to the original holder. “Even though the second quarter rules of RSIC have not yet been announced, it is possible that the blocks currently held are already being counted for points,” 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 front-runners like Runestone and RSIC, there are also many meme coins with Bitcoin-native elements released in a completely fair way, indicating huge alpha opportunities.

Fairness is one of the core values of memes. If a meme reserves too much share for itself, the community usually won’t support it. A true “fair launch” means no funds are set aside for founders or early investors, ensuring equal opportunities for all participants.

Additionally, recognition is a key factor in a meme’s success. For example, the market value of Puppet and Wizard, which had previously been highly recognizable on BRC-20, had increased significantly before Runes was launched. The runes they deploy and airdrop now are rune No. 13 PUPS•WORLD•PEACE and rune No. 17 MAGIC•INTERNET•MONEY respectively. Another example is BITCOIN•PEPE•MATRIX. Sea particularly admires the embodiment of Pepe elements in Runes, which are runes issued by an overseas Pepe OG community. He mentioned that “the image of Pepe has been widely used in the Internet community from early comics to now. The various expression packs that circulate are extremely powerful and reach millions or even tens of millions of audiences.”

“[The ticker is elsa] was the only project I played on the first day Runes came online”. Sea said. Elsa is the name of the pet dog of Bitcoin OG Hal Finney. Hal Finney was the first transaction on the Bitcoin network and went down in history because Satoshi Nakamoto transferred 10 BTC to him. Hal Finney passed away from health issues in 2014, and his status in the community cannot be ignored, adding deep historical significance to the related meme. After all, this is in the Bitcoin ecosystem. If it has elements of Bitcoin, it will naturally be more popular.

Hal Finney and his dog (source: network)

In addition, the epic Bitcoin NFT project Blob, which obtained the fourth Bitcoin halving block from ViaBTC for 33.3 BTC, is also worthy of attention. Its elements such as laser eyes, rare satoshis, and halving all represent the pure elements of Bitcoin.

Related Reading:”Recently Popular Blob Army Explained: BTC NFT Full of Artistic Attributes”

According to data from Magic Eden, the Blob’s floor price increased by more than 55% in 24 hours, reaching a quoted price of 0.0543 BTC.

Recently, the co-founder of the Bitcoin NFT project Blob (@Elocremarc), also the current sixth-ranked contributor to the Ordinals protocol, is currently developing “recursive runes”, and it is expected that Blob will also take action in the rune ecosystem in the future.

In the communication with BlockBeats, Sea also expressed his expectations for Blob in the Runes ecosystem: “If Blob is issued coins in the future and operates well, I think it will be an excellent meme. After all, the current Runes meme is barely interesting. But this is just my guess, I guess the probability of Blob issuing coins is probably 30%.”

Will Runes also have a product narrative?

In the early days, most people’s impression of the Bitcoin ecosystem was all about memes, but after a year of development, the market already has more things, including Bitcoin’s second layer and lending.

The same goes for Runes, which initially seemed to be only about memes, but over time, especially on a year-by-year basis, definitely became more than just memes. BlockBeats also observed that there is already a Bitcoin lending protocol being warmed up on Runes.

A prominent example is Shell Finance, a trustless lending and borrowing protocol built on top of Bitcoin’s Layer 1. With the help of PSBT and DLC technology, Shell Finance enables a lending and settlement process in a trustless environment. This protocol contains two core modules: one is a synthetic stablecoin asset $BTCx that anchors the value of $BTC and issuance; the other is a lending protocol that supports the use of a variety of inscription assets (including Ordinals, Runes, Atomics, Stamps, etc.) as collateral to lend $BTCx.

Currently, Shell Finance is issuing its own NFT-Darkman whitelist in various NFT asset communities in Bitcoin, and Darkman holders will also have the opportunity to receive Runes token airdrops released by Shell Finance in the future.

In an exchange 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 products and liquidity.

“Our approach is that we choose to conduct functional testing (FT) first, because we are a lending project that focuses on actual landing. For lending projects, we mainly need two things: qualified users and necessary liquidity. In order to let potential users know about us, we did not conduct 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 the target users we will focus on in the future.” Shell Finance explained its market strategy and product positioning.

When Shell Finance’s main product (MP) launch is complete, they have 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 hype logic of the three types of Runes protocols mentioned above (swing Runestones, Bitcoin degen memes, and long-term product narratives), there are also some consensus opportunities on the market, including what 0xWizard said “projects launched by ordinals og; eth or other well-known projects on the chain, such as Prometheus; projects that can introduce Solana liquidity in the future.” We will not discuss them one by one.

At present, after Runestone has issued the airdrop, both in terms of liquidity and floor price, Runestone and its airdropped DOG•GO•TO•THE•MOON are still temporarily ranked as the “longest”, but in the long run it is possible that they will be “overtaken in a corner”. BlockBeats will also continue to track the subsequent development of the Runes protocol.

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