Key Points
- The upcoming Bitcoin halving has sparked interest due to the introduction of Runes, a new protocol by Bitcoin developer Casey Rodarmor.
- The hype around Runes, especially from the PUPS project, has led to a significant increase in Bitcoin transaction fees.
The imminent halving of Bitcoin has drawn attention not just due to the reduction of Bitcoin’s issuance to 3.125 BTC, but also because of Runes.
Introduction of Runes
Runes is a novel protocol developed by Bitcoin developer Casey Rodarmor, known for his work on Ordinals. The main concept of Ordinals was to introduce non-fungibility to Bitcoin, distinguishing specific satoshis by their minting order. This led to the emergence of the BRC-20 token standard, which facilitated the issuance of fungible tokens to the network.
Runes shares similarities with BRC-20 as it aims to enable new tokens to be traded on Bitcoin. However, it differs by using a UTXO (unspent transaction output) model. Runes is essentially intended to be a more efficient token issuance system, designed to avoid network congestion.
Rodarmor announced Runes in September 2023, providing ample time for anticipation to build. Given the success of BRC-20, it’s unsurprising that many are speculating that Runes could be the next big thing. In January, OKX announced it would support Runes in its wallet and marketplace.
Runes Anticipation Market Success
The Runes anticipation market has already seen significant success, most notably with the PUPS token. PUPS, currently a BRC-20, has achieved millions of dollars in daily trading volume this month, according to CryptoSlam. It was the second most traded NFT/BRC-20 collection over the past week. Each BRC-20 PUPS token will have a claim to the PUPS Runes token, which will convert once Runes is launched.
The PUPS project emphasizes its status as a memecoin on its website, which could be a factor in its popularity, given the current trend for memecoins. The excitement around Runes has led to a rise in Bitcoin transaction fees. The 7-day moving average of the average transaction fee on the network has increased from $4.11 earlier in the month to $12.17 now.
This increase, although still lower than the peak seen in December during the Ordinals hype, has pushed Bitcoin’s fees above those of Ethereum. Ethereum’s fees have been decreasing as cheaper layer 1s and scaling networks divert much of the activity that was previously concentrated on the primary DeFi blockchain.