Memecoins
Memecoins on Bitcoin are about to be boosted. Here’s how – DL News
- The Runes update is expected to go into effect alongside the Bitcoin halving.
- Runes will bring greater efficiency and capacity for tokens built on the original blockchain network.
- Traders are already flocking to Bitcoin projects ahead of launch.
The proverbial digital rock of cryptocurrencies is receiving a major update aimed at dramatically increasing the use of memecoins on the Bitcoin network.
And as Bitcoin approaches its fourth halving, the upgrade is expected around the same time.
Called Runes, it is expected to formalize how inscriptions – essentially Bitcoin NFTs – and tokens are exchanged and minted.
Launching and speculating on a memecoin or NFT on Bitcoin is currently a rather complicated experience for developers and investors.
However, that hasn’t stopped users.
Ordinals Inscriptions, the first real experiment to make Bitcoin a token launchpad, has already generated more than $415 million in transaction fees from 2022.
Casey Rodarmor, the creator of Ordinals, hopes to meet this new demand and increase it with Runes.
But what is the Runes protocol and how does it work?
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Bitcoin tokens, but faster
At the heart of the Runes is the use of Bitcoin’s UTXO — Unspent transaction results — template.
In this model, each transaction begins by identifying shards of Bitcoin that have not been spent – similar to collecting digital loose change – and uses them to create new transactions.
Runes stores data in the file OP_RETURN field in Bitcoin transactions. Imagine scribbling a bill on a physical bill to identify it later; OP_RETURN serves a similar purpose but in digital format.
This method of data storage does not change the value of the transaction but allows it to be added metadata transactions without cluttering the network with unnecessary data.
This keeps the network efficient, reducing latency and transaction costs, which is especially beneficial for a network like Bitcoin.
These changes represent a major upgrade, as Brian Rudick, senior strategist at cryptocurrency markets maker GSR, said DL News.
“Personally, I think there is a real possibility that Runes will become the de facto fungible token standard on Bitcoin, since it is UTXO-based, keeps all transactional data onchain, and has a smaller onchain footprint.”
The most important aspect of the update is that it gives Bitcoin much more utility.
Pigeonholed as digital gold meant for HODLing rather than spending or flipping memecoins, Bitcoin with Runes looks much more like layer 1 blockchains that allow users to trade tokens.
Preparation for the runes
Going into the update, the demand for Bitcoin NFTs is already high.
Second data from nftpulsean NFT analytics site, Bitcoin NFTs have led all blockchains in terms of trading volume and active traders over the past 30 days.
Runestone is one such project, starting with an airdrop to more than 112,000 users who held at least three non-text Ordinals in their Bitcoin wallet. The value of the airdrop was estimated at approximately $300 million, of which more $215 million in volume on NFT markets.
Following the Runes update, Runestone holders should receive airdrops from three different Runes memecoin projects.
The first airdrop, named DOGis expected to drop at the end of this month, while the other two memecoins are expected to airdrop later in the year.
On the other hand, existing BRC-20 projects, the current standard for Bitcoin-based tokens, are faced with a decision: stay with BRC-20 or switch to the Runes standard. Many have already announced their intention to adopt the new standard.
PUPS, a memecoin launched by plane Bitcoin puppet owners e OPIUM owners, have already signaled that they will switch to Runes.
PUPPIES it is the third largest BRC-20, up more than 1,226% over the past 30 days, with a market capitalization of $462 million.
WZRDanother memecoin that has signaled the transition to the new Runes standard, has grown by 257% in the last seven days.
Ryan Celaj is a data correspondent at DL News. Do you have advice? Send him an email at ryan@dlnews.com.