The rune craze returns, led by DOG, analysis of track development trends

1. Overview of Runes

At the beginning of 2023, the BRC-20 standard derived from the Ordinals protocol triggered a wave of Bitcoin asset construction and speculation, promoting the development of the BTC Layer 2 and DeFi ecosystems. However, BRC-20 also led to network congestion and data redundancy. In response, the founder of the Ordinals protocol, Casey Rodarmor, proposed the Runes protocol in September 2023, aiming to build an alternative token standard based on BTC UTXO.

The Runes protocol officially launched on April 20 this year during the Bitcoin halving. In the initial phase, due to the surge in the first batch of rune minting, the BTC network Gas fees soared to over 1000 sats. Although the hype subsequently receded, recently DOG has surged from a low to a new high, once again triggering the rise and attention of rune assets.

1. Rune Operation Mechanism

The Runes protocol utilizes Bitcoin's native UTXO model to issue and track tokens, making it more decentralized. The rune balance is directly held by the UTXO, and a single UTXO can accommodate any number of runes, avoiding the creation of "garbage" UTXOs, improving efficiency and reducing on-chain occupancy.

Specifically, Runes data is stored in the OP_RETURN field, which allows for the storage of 80 bytes of data in the transaction output. The transaction conveys protocol messages through the OP_RETURN marker followed by a data push of uppercase letter R. Issuance or transfer transactions are specified and allocated to UTXOs in subsequent data pushes. Invalid protocol messages result in the runes being destroyed.

2. Rune and BRC-20 Comparison

Compared to BRC-20, the Runes protocol has the following features:

(1) Runes are designed specifically for fungible tokens, based on the native architecture of BTC, not relying on off-chain data and requiring only a single minting, making it simpler and more efficient. BRC-20, on the other hand, is based on the Ordinals protocol, which is more suitable for non-fungible tokens, relies on off-chain indexing, and requires two mintings, making it more complex.

(2) Runes data is stored in an 80-byte OP_RETURN field, and BRC-20 can use witness data up to 4MB. Tokens built with Runes have stronger compatibility, occupy less space, and alleviate blockchain expansion.

(3) Runes are based on the UTXO model, integrating with the native BTC architecture and inheriting its security. Future scalability is stronger and can perfectly integrate with ecological development routes such as the Lightning Network and BTC L2.

3. The meaning of runes

(1) has created a new method for BTC asset issuance, attracting more attention and funds into the BTC ecosystem. The 2023 SOL and meme craze on the Base chain shows that the attraction of memes for capital on the chain cannot be ignored. Runes have created a dedicated, replaceable, and more suitable token standard for speculative activities for BTC.

(2) The asset issuance method is simpler, more efficient, and compatible. Based on the native UTXO architecture of Bitcoin, it does not rely on third parties or off-chain data, occupies less space, reduces network congestion, and can seamlessly integrate with various upgrades and ecological solutions of the BTC network in the future.

( helps to address the Bitcoin security budget issue. Rune trading contributes more transaction fees to the network, especially after the halving, providing miners with a new source of income, which is beneficial for maintaining network security and sustainability.

2. Track Data Overview

From the BTC network data, runes currently account for about 20% of the total transaction volume and share of the network. When the protocol was first launched, it peaked at 81.3%, and then declined, currently fluctuating between 10-40%.

![DOG leads rune popularity back, when will the track see an explosion?])https://img-cdn.gateio.im/webp-social/moments-5dba07164c130e4c683659d62d2526b0.webp(

Compared to rune and BRC-20, rune has become the most active L1 asset outside of BTC trading, with a ratio of about 4:1. The highest proportion of rune appeared around the halving at about 99%, while the lowest was about 55%. The current trading heat has exceeded that of BRC-20 tokens.

![DOG leads rune popularity back, when will the track experience an explosion?])https://img-cdn.gateio.im/webp-social/moments-75d0c66c3cd2af6015e7e1c96dbfe497.webp(

In terms of fee contribution, currently the native Bitcoin transaction fees account for 70-80%, rune accounts for 10-20%, and Ordinals and BRC-20 together account for about 10%. On halving day, the proportion of rune reached as high as 70%. The speculation of rune has broadened the income sources for BTC network miners, making it the highest proportion in new assets.

![DOG leads the rune popularity back, when will the track witness an explosion?])https://img-cdn.gateio.im/webp-social/moments-808cae98824e7196e8bfaade6e246f24.webp(

Treat runes and BRC20 as memes, with the market cap of meme assets on the Bitcoin chain accounting for less than 0.1%, far lower than the 3% or more of ETH and SOL. Considering BTC's consensus, market cap, and attention, there is room for the market cap share of its meme coins to expand further. In vertical comparison, the overall trading volume and fee contribution of runes have surpassed BRC-20, but the market cap of leading projects still has a gap; if they can be listed on mainstream exchanges, they are expected to surpass ORDI.

![DOG leads the rune popularity back, when will the track usher in an explosion?])https://img-cdn.gateio.im/webp-social/moments-bdb7458e5eaa76cde904f29a4573763d.webp(

3. Rune Assessment System and DOG Analysis

The popular projects of runes can be evaluated from three stages and nine dimensions: in the early stage, focus on distribution methods, degree of decentralization, founders and storytelling; in the mid-stage, focus on continuity of dissemination and price continuity; in the mature stage, focus on trading volume, market capitalization, chip structure, and price stability.

The current analysis of the leading DOG in the rune track is as follows:

1. Distribution Method: Phased issuance, first launching rune stone NFTs for preheating, with the first rune airdropped after the halving day of the rune protocol goes live. Airdrop recipients are free, and the project party bears the on-chain issuance costs, with reasonable design.

![DOG leads the rune popularity back, when will the track see an explosion?])https://img-cdn.gateio.im/webp-social/moments-f34363e2c2e0e61a683f3cb0451e929a.webp(

2. Degree of dispersion: Early stakeholders have high quality and a large number. Rune stones airdropped to over 110,000 users who actively participated in the BTC inscription ecosystem in the past, and DOG airdropped to over 70,000 steadfast rune stone holders, achieving a rapid cold start and wide dissemination.

3. Founders and Storytelling: Founder Leonidas is an OG in the BTC community and has a close relationship with Ordinals founder Casey. The design of the rune stone is artistic, and DOG, as the first rune, has strong dissemination power.

4. Continuity of propagation: Founder Leo has a strong influence in the European and American communities, consistently promoting at a high frequency to capture market attention.

5. Price Continuity: Rune stones and DOG are being promoted in succession, and the price trend is good. There are two more airdrops for rune stones in the future, which are expected to drive up the price again.

![DOG leads the rune heat back, when will the track welcome an explosion?])https://img-cdn.gateio.im/webp-social/moments-876f7d61cb99dd639a13af9a0d016009.webp(

6. Trading Volume: The trading volume of DOG far exceeds that of other runes, with a daily trading volume exceeding 70 million USD, making it the best in terms of liquidity.

![DOG leads the rune popularity back, when will the track see an explosion?])https://img-cdn.gateio.im/webp-social/moments-a0725c25ddf7ab7ec6fe5edde7d1cfb0.webp(

7. Market Cap: After excluding low liquidity projects, DOG basically maintains the first position in market cap.

![DOG leads the rune popularity back, when will the track witness an explosion?])https://img-cdn.gateio.im/webp-social/moments-d59e22a3cb255cbd615c9536cb46c22d.webp(

8. Chip structure: On-chain holders remain stable above 70,000, but the chips are not concentrated enough, which may affect the launch on first-tier exchanges.

![DOG leads the rune popularity back, when will the track迎来爆发？])https://img-cdn.gateio.im/webp-social/moments-9af4478779050d3e939138f8107d846d.webp(

9. Price Stability: After consolidating at the bottom, it has been steadily rising, further increasing after consolidating at key price levels, with strong buyer strength during pullbacks.

![DOG leads the rune popularity back, when will the track see an explosion?])https://img-cdn.gateio.im/webp-social/moments-4ce26cbeaa41997993c6dc9ad6d84b5e.webp(

4. Summary

1. The Rune Protocol is designed specifically for fungible tokens, being simpler, more efficient, and compatible than BRC-20. It has surpassed BRC-20 in terms of trading volume and fee contribution, becoming an important new asset class.

2. Runes primarily enhance the appeal of the Bitcoin network as a meme coin, which has significant potential for sustainable development, but a full breakout still requires time, and there is further price discovery potential.

3. Based on the proposed evaluation system, DOG is currently in a leading position in its track, but the chips are relatively scattered, and it may take time to accumulate on mainstream exchanges.

![DOG leads rune popularity back, when will the track see an explosion?])https://img-cdn.gateio.im/webp-social/moments-9aaa624a45b4074b9045889a36d00f5c.webp(

![DOG leads the rune popularity back, when will the track welcome an explosion?])https://img-cdn.gateio.im/webp-social/moments-c937589e5cf0ab3b65cfb77f882260b5.webp(

![DOG leads rune popularity back, when will the track welcome an explosion?])https://img-cdn.gateio.im/webp-social/moments-29eece7409226eaa6a3012fa3ad15432.webp(