The Rune Protocol Leads a New Wave for Bitcoin, DOG Becomes the Front Runner in the Track

At the beginning of 2023, the Ordinals protocol and BRC-20 standard sparked a wave of building and speculation around BTC assets, driving the development of BTC Layer 2, DeFi, and other ecological infrastructure. However, the speculation around BRC-20 also brought issues of network congestion and redundant data. In response, the founder of the Ordinals protocol, Casey Rodarmor, proposed the Runes protocol in September 2023, aiming to build an alternative token protocol based on BTC UTXO.

The Runes protocol was officially launched on April 20 this year during the Bitcoin halving. Initially, due to the popularity of the first batch of rune minting, the Gas fee on the BTC network soared to over 1000 sats. Although the excitement quickly faded, recently the price of DOG has risen to new highs from its bottom, once again driving the surge and attention towards the rune targets.

1. Overview of Rune

1. How Rune Works

The Runes protocol uses Bitcoin's native UTXO model to issue and track tokens, making it more native and decentralized. Rune balances are directly held by UTXOs, and a single UTXO can accommodate any number of runes, preventing the creation of "garbage" UTXOs, thereby improving efficiency and reducing on-chain space usage.

Specifically, the data for Runes is stored in the OP_RETURN field, which is the opcode for Bitcoin transactions, allowing for the storage of 80 bytes of data in the transaction output. Transactions use the OP_RETURN tag in the protocol message, followed by a data push with the uppercase letter R. Issuance or transfer transactions are specified and assigned to UTXO in subsequent data pushes. Invalid protocol messages will result in the destruction of runes.

2. Rune and BRC-20 Comparison

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

(1) Runes are specifically designed as replaceable tokens, based on the native architecture of Bitcoin, without relying on off-chain data and requiring only a single minting, making it simpler and more efficient.

(2) Runes data is stored in an 80-byte OP_RETURN field, while BRC-20 uses witness data, which can occupy up to 4MB. Tokens built on Runes are more compatible, occupy less space, and reduce blockchain bloat.

(3) Runes protocol is based on the UTXO model and can integrate with the native BTC architecture while inheriting its security. In the future, it will have stronger scalability and can perfectly integrate with the BTC ecosystem development routes such as the Lightning Network and BTC L2.

3. The significance of runes

(1) created a BTC asset issuance method that can break the circle, establishing a dedicated, alternative, and more suitable token standard for speculative activities.

(2) is simpler, more efficient, and compatible compared to before. The Runes protocol is based on Bitcoin's native UTXO architecture, does not rely on third parties or off-chain data, occupies less space, reduces network congestion, and can seamlessly support various upgrades and ecological solutions of the BTC network in the future.

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

2. Track Data Overview

According to BTC network data, rune currently accounts for about 20% of the total network transaction volume. When the rune protocol was first launched, trading was very hot, reaching a peak of 81.3%, but then quickly declined. Currently, the proportion of rune in the network is about 10-40%.

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

Compared to runes and BRC-20, runes have currently become the most active L1 asset outside of BTC transactions, with a ratio of about 4:1 between the two. The highest proportion of runes occurred at the time of the halving release, at about 99%, while the lowest was around 55%. Currently, the trading popularity of runes has surpassed that of BRC-20 tokens.

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

In terms of fee contribution, the current native Bitcoin transaction fees account for 70-80%, rune accounts for 10-20%, and Ordinals plus BRC-20 account for about 10%. On halving day, the rune proportion reached as high as 70%. Currently, the speculation of runes has broadened the income sources for BTC network miners and contributed the highest proportion among new assets.

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

If runes and BRC20 are regarded as memes, the market value of meme coins on the Bitcoin chain occupies the lowest proportion compared to meme coins on other chains, accounting for less than 0.1% of that chain. In horizontal comparison, the leading meme coins on the ETH and SOL chains account for more than 3% of their respective chain market values. As BTC has the highest consensus, market value, and mainstream financial attention, there is further potential for the market value proportion of meme coins to expand. In vertical comparison, the overall rune has surpassed BRC-20 in terms of trading volume and contribution fees, but the leading rune still lags behind the leading BRC-20. If it can be listed on a first-tier exchange, it has the potential to surpass ORDI.

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

3. Rune Assessment System and DOG Analysis

The evaluation of popular rune projects can be analyzed from three stages and nine dimensions:

Early focus: distribution method, degree of decentralization, founders and storytelling Mid-term focus: propagation continuity, price continuity Maturity period focus: trading volume, market capitalization, chip structure, price stability

According to the above logic, the leader in the current rune track is DOG:

1. Distribution method: The distribution design progresses layer by layer and bears all on-chain costs, with a large scale.

2. Degree of decentralization: Early stakeholders with high quality and a large number achieved rapid cold start and extensive dissemination among core users.

3. Founders and Storytelling: Founder Leonidas is an OG of the BTC community and a co-founder of the cutting-edge Ordinals browser Ord.io, with a close relationship with Ordinals founder Casey.

4. Continuity of Spread: Founder Leo, as an OG of the BTC community, has strong dissemination power and resources, especially in the European and American communities, frequently promoting and continuously capturing the market's attention.

5. Price Continuity: Rune stones and rune relay hype, after a month of market pricing and consolidation, began to rise from mid-May.

6. Trading Volume: The trading volume is dramatically ahead of other runes, with the best liquidity. The current daily trading volume exceeds 70 million USD, while the second-ranked Runes x is only around 2 million USD.

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

7. Market Cap: Ranks first in terms of overall market cap.

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

8. Chip structure: The number of holders is large, but the chips are not concentrated enough. The number of on-chain holders remains stable above 70,000, ranking third in runes.

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

9. Price Stability: Price stability is trending upward. After stabilizing around the bottom at approximately 0.002, the increase has been steady and strong. Further upward movement can be expected after stabilizing at points 0.004 and 0.007.

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

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

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

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

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

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

4. Summary

1. Rune is a protocol specifically designed for fungible tokens, technically simpler, more efficient, and more compatible than BRC-20. In terms of trading volume share and transaction fee contribution, it has surpassed BRC-20 tokens, becoming a new asset form that must be taken seriously.

2. Runes are currently mainly used as meme coins to enhance attention and capital capture for the Bitcoin network, which has the significance of continuous development. However, from the data, it has not yet welcomed a full-scale explosion and has further price discovery potential.

3. This article proposes a three-stage, nine-dimensional evaluation system for the rune project. Currently, DOG is in a leading position compared to other assets, but its chip structure is relatively dispersed at this time, and it may take some time to accumulate before landing on a top-tier trading platform.