The much-anticipated Bitcoin halving, scheduled for April 2024, is fast approaching, and the buzzing in the crypto market is getting louder. Alongside this event, the rise of Ordinals and the launch of the Runes Protocol promise to open a new niche within the Bitcoin ecosystem.
In this article, DWF Ventures explores the phenomenon of Ordinals, BRC-20, and the Runes Protocol at a closer glance, and give some implications on their future scenarios. Below, you can check out the brief snapshot of the Ordinals ecosystem we made, with crypto projects placed on a scale of volume and market cap:
Ordinals
Ordinals, introduced by Casey Rodarmor in January 2023 not without controversion, unlocked the ability to inscribe data directly onto individual satoshis, creating artifacts similar to NFTs on Bitcoin. This has since driven a wave of developments, including the emergence of BRC-20 tokens and the Runes Protocol.
Ordinals have seen exponential growth, especially as the Bitcoin halving and the launch of the Runes Protocol draw near. In fact, trading volumes on Bitcoin have recently rivaled those on Ethereum, with OKX and MagicEden serving as primary marketplaces. Such a growth shows the increasing appeal of Bitcoin-based developments.
Popular NFT collections on Ordinals, such as Nodemonkes, Bitcoin Puppets, and Quantum Cats XYZ, have further amplified the ecosystem’s vibrancy. These collections have distributed valuable airdrops, including the likes of Runecoin and Pups, to their holders. This has not only rewarded the community but also fostered a loyal and active base of supporters, driving excitement around the Runes Protocol.
BRC-20
Building on Ordinals, BRC-20 acts as a fungible token standard that leverages this technology to create interchangeable tokens, similar to Ethereum’s ERC-20, by storing token data within the Bitcoin blockchain. In April 2024, Runes emerged to address some limitations of Ordinals and BRC-20.
Runes Protocol
Also developed by Casey Rodarmor, Runes acts as the fungible counterpart to Ordinals, reducing complexities with its UTXO-based model. It offers lower data and storage requirements compared to BRC-20 tokens, making it an attractive choice for developers and users alike. Pre-Rune projects have gained substantial attention, with Runecoin holders mining RSIC runes and pooling their positions to maximise rewards. The pre-market for RSIC on Whales Market is already live, creating buzz around the protocol even before its official launch.
A standout within the Runes ecosystem is Pups, the leading memecoin for Runes. Part of its supply was airdropped to Bitcoin Puppets and OPIUM holders, fostering a strong and engaged community from the outset. Its interoperability with Solana, enabled through Multibit, has further expanded its appeal, drawing attention from across the blockchain space.
Overall
As the Bitcoin halving approaches, many protocols are expected to launch or migrate to Runes. While concerns about fragmentation and a lack of unified standards persist, we believe that this lays a strong foundation for enhanced use cases and will see mass interest similar to the time when BRC-20s had launched.
As the crypto venture capital fund, we believe in supporting builders for Bitcoin and its growing ecosystem. If you are looking for a like-minded partner, reach out to us at DWF Ventures.
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