Are Bitcoin Runes Here to Stay?

TL;DR
Runes Protocol, which enables fungible tokens on Bitcoin, is closely connected to Ordinals Protocol, which enables NFTs on Bitcoin. NFT marketplace Magic Eden is leading the way in integrating Runes, and though there are criticisms around initial friction, the Runes ecosystem is building rapidly. In these early stages, some leading Runes to have emerged so far include DOG•TO•THE•MOON, MAGIC•INTERNET•MONEY, and SATOSHI•NAKAMOTO, with PUPS also gaining traction, although it has yet to release its Runes token.

The Bitcoin halving rolled around last weekend, but with it this time came something new: the launch of Runes Protocol. Let’s take a look at how Runes tie in with NFTs and how the new protocol has been received so far, along with where it might be headed from here and whether it’s worth buying in.

What Are Runes?

In a nutshell, Runes are fungible tokens on Bitcoin that improve on the earlier BRC-20 format, and as the current crypto bull run has been dominated by meme coins so far, Runes too are–at this very early stage–heavily focused on memes.

Runes have a unique naming convention which doesn’t allow for multiple identical tickers, includes dots between words, and specifies that names must contain between 13 and 28 characters, although those numbers will reduce in future. Also though, a little confusingly, Runes so far have adopted regular tickers in addition to their Runes names.

Also, Runes projects are numbered in the order they’re created, leading to the possibility of memes gaining value through having lower numbers, so, for example, the first ten might gain special status.

And notably, there is a close connection between Runes and Ordinals–which are like NFTs on Bitcoin–with several Runes tokens stemming from Ordinals collections and being airdropped to Ordinals holders.

Magic Eden Integration

For Runes to take off, infrastructure and a smooth UX are important, but the reality is that the UX at launch has been far behind the kind of experience you’ll have trading Solana meme coins.

However, leading NFT marketplace Magic Eden is speeding ahead when it comes to making improvements, and Runes are now live on the platform. Trading on Magic Eden, you’ll notice that Runes currently operate somewhere between an NFT and a meme coin: if you’re buying, then you purchase set batches of tokens, and if you’re selling, then you list batches, similar to how you’d list NFTs.

It works for now, but there’s a lack of fluidity, especially if you’re coming straight across from a regular DEX. However, the adage is that where there’s friction, there are early opportunities, it’s generally better to get started before easier mechanisms are in place, and what’s more, Magic Eden is already set to roll out upgrades.

Also though, besides Magic Eden, there are some bigger exchanges jumping on board, with OKX listing the tokens DECENTRALIZED and THE•RUNIX•TOKEN, Gate.io listing SATOSHI•NAKAMOTO, MEME•ECONOMICS, WANKO•MANKO•RUNES, and DOG•GO•TO•THE•MOON, and Binance teasing the possibility of listings.

Minting vs Buying

Many new Runes tokens are launching through an NFT-like minting process, meaning buyers create new tokens through the process of buying. Platforms on which to find new mints include RuneData and Luminex, but be warned: there have been very high network fees since Runes launched, along with orders being sniped, leading to the loss of fees.

By comparison to this, buying tokens on secondary is currently a cheaper and less risky option. There are also Runes that have not yet been issued, but which can be pre-market traded at Whales Pro.

Tools for Runes

The two major wallets for Runes trading are Xverse and Unisat, both of which can be hooked up to Magic Eden and other Runes platforms.

For information on Runes market caps, meaning you can get a rundown of the current top tokens, take a look at RunesMarketCap. Then there’s on-chain explorer Ordiscan, which has a trending Runes section, while BTC Tool uses an animated bubble map. Meanwhile, Runes Terminal is building out a whole suite of Runes resources.

Top Runes Coins

Gaining a huge share of attention, there is DOG•GO•TO•THE•MOON (aka DOG), which was airdropped to holders of Runestone Ordinals. Led by Leonidas, who is relentless in his promotion of the token, it’s taken the approach of openly aiming for mass market buyers rather than the crypto degens who have been powering the meme casino up to now.

Then there’s DECENTRALIZED, which was created by the OG NFT outfit CyberKongz, giving it an immediate connection to Ethereum NFTs, and which managed to snag position number two in the earliest Rune rankings.

And an incoming token that’s picked up a huge amount of hype is PUPS (full Runes ticker PUPS•WORLD•PEACE), which already exists cross-chain as both a BRC-20 and a Solana token, and draws on the meme value of the Bitcoin Puppets Ordinals collection. Those BRC-20 and Solana tokens will be convertible to Runes at a later date, and PUPS seems like the antithesis of the mainstream-friendly DOG•TO•THE•MOON, as it has traction primarily among crypto natives deep in the meme trenches.

There are many other projects of interest, with RSIC•GENESIS•RUNE, MEME•ECONOMICS and SATOSHI•NAKAMOTO chief among them, but as the whole ecosystem is so young and full of unknowns, there’s potential in all corners.

Criticism and Opportunity

The Runes Protocol launch was hyped up going into the halving but has received criticism since, due to the initial lack of a smooth trading experience, but is the FUD fair?

The faults are real, but at the same time, we’re talking about an ecosystem that’s a week old and still building. What’s more, it was a similar story when Ordinals launched, and looking back, there were tremendous opportunities for those who jumped in early and let it cook.

Also, although Runes are very meme-centric, that’s partly because we’re in a crypto meme-season and everything right now is meme-centric. In future though, alternative uses are possible, and Runes-enabled DeFi is an area still to be explored.

There are no guarantees, but for now, the Runes Protocol feels early and open to expansion, with the potential not only for meme coins, but also for other utility and experimentation.