- Bitcoin Ordinals developer Casey Rodarmor came up with Runes as a means of eliminating the proliferation of unspent tokens on the network.
- Runes is aimed at bringing significant transaction fee revenue, developer mindshare, and users to Bitcoin.
- Ordinals have seen a massive drawdown in the unique users from the peak of 15k in June to less than a thousand at the moment.
Bitcoin in the Decentralized Finance (DeFi) space noted stellar growth earlier this year when the network witnessed the arrival of the BRC-20 standard. Akin to Ethereum’s ERC-20 standard, BRC-20 allowed the creation of fungible tokens on the network through the Ordinals protocol. However, the creator of the protocol is now suggesting a new standard in place of BRC-20.
Bitcoin BRC-20 could be replaced by Runes
Bitcoin Ordinals’ developer, Casey Rodarmor, published a post on September 25 highlighting the potential alternative to the BRC-20 token standard called “Runes”. The need for Runes, according to Rodarmor, arose from the need to eliminate the UTXO proliferation caused by BRC-20.
UTXO, also known as Unspent Transaction Output, is basically units of the digital currency remaining after a transaction is completed. Since BRC-20 is not UTXO-based, the increased demand and creation of fungible tokens have resulted in a sudden increase in the UTXOs.
To deal with this, Runes balances would be designed to be held on UTXOs, allowing a single Unspent Transaction Output to hold any amount of any number of Runes. This way, the UTXO proliferation can be responsibly managed in return, creating a fungible token protocol that might bring significant transaction fee revenue, developer mindshare, and users to Bitcoin.
Rodarmor claimed that such a protocol would very easily fit into Bitcoin’s native UTXO model. He added,
“Such a scheme might draw users from other schemes with worse on-chain footprints, and bring developer and user mindshare to Bitcoin, encouraging them to adopt Bitcoin itself.”
Bitcoin Ordinals continue to lose traction
Bitcoin Ordinals peaked around May this year but started to lose ground sometime towards the beginning of June. The marketplaces began losing daily users, and at the time of writing, over 93% of the unique daily users had disappeared. At its peak, these users amounted to more than 15K, while presently, less than 1,000 unique daily users have been registered on the Ordinals marketplace.
Bitcoin Ordinals daily unique users
The current condition of the crypto market is arguably not enticing to users or investors. However, from a technical perspective, if Runes manages to draw the attention of developers, it could have a positive impact on the course of Bitcoin DeFi.
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