Runes Protocol: The Rise of a New Issuing Coin Standard in the Crypto Market

The ERC20 protocol of Ethereum, as the primary issue coin standard in the encryption currency field, has had a profound impact on the entire industry. It has not only promoted the development of the Ethereum public chain, making it the most mainstream smart contract platform in the crypto circle, but also paved the way for the rise of decentralized finance (DeFi). Additionally, the emergence of ERC20 has provided new possibilities for decentralized financing and entrepreneurship, making the investment and financing processes more direct and efficient.

Currently, many emerging public chains are attempting to replicate the successful model of Ethereum, striving to establish their own token standards. To stand out in this competitive field, new public chains need to meet two key conditions: first, they must have a sufficiently large market capitalization to establish a solid market position; second, they must innovate in the issue coin protocol to gain recognition from the encryption community.

In this context, the Runes protocol demonstrates potential that goes beyond ERC20. Its advantages are mainly reflected in the following aspects:

1. Strong market capitalization foundation: As the king of the crypto market, Bitcoin accounts for about 50% of the entire market share, providing a solid development foundation for Runes.

2. Innovative Issuance Mechanism: The Runes protocol has iterated on the fair launch of BRC20, integrating the advantages of both BRC20 and ERC20, while serving as an asset issuance protocol on the Bitcoin mainnet, offering unique advantages.

The main features of the Runes protocol include:

• Use the op_return of UTXO to describe basic operations such as token deployment, minting, and transfer.
• Flexible issuance methods that support fair launches, team reserves, or a combination of both.

Compared to BRC20, Runes have the following advantages:

• A more flexible issuance mechanism that benefits team fundraising.
• More efficient transfer process, no additional transaction engraving required.
• Support batch transfers to improve transaction efficiency.

Compared to ERC20, the advantages of Runes are:

• Based on the Bitcoin network, with a more solid foundation.
• As an emerging protocol, it has greater growth potential and market attention.
• Compatible with the fair issuance mechanism of BRC20, aligning with the current crypto market trends.
• Complex business logic can be implemented through Bitcoin Layer 2 solutions.

The deployment, minting, and transfer process of the Runes protocol is achieved by including specific op_return information in the transactions. This design allows the protocol to maintain flexibility while ensuring the efficient execution of transactions.

Overall, the Runes protocol, as an innovative issue coin standard, combines the stability of the Bitcoin network with the flexibility of emerging protocols, and has the potential to occupy an important position in the future crypto market. With more projects and users participating, Runes may become the next mainstream issue coin protocol after ERC20.