Runes Catalyzes Bitcoin Development, Sidechains and DeX Protocols Race to Integrate New Standard
The Bitcoin Runes protocol has kicked off a wave of development. Photo by Nubelson Fernandes on Unsplash.
Key Takeaways
- In the week since the launch of Bitcoin Runes, developers have been busy with the new token standard.
- Various Bitcoin sidechains and Layer 2 platforms have now integrated Runes.
- The race is on to build the first Runes decentralized exchange.
In the week since the Bitcoin Runes protocol launched, developers have moved quickly to create supporting infrastructure for the new token standard.
Motivated by the promise of bringing Ethereum-style DeFi to Bitcoin, competing projects are racing to build the first Decentralized Exchange (DeX) for Runes. Meanwhile, a host of sidechains and Layer 2s are exploring ways to integrate the new protocol.
Runes Open a New Chapter for BTC Meme Coins
Compared to the competing fungible token standard, BRC-20, Runes has a much smaller on-chain footprint.
The brains behind the protocol, Casey Rodarmor, has stated that “Runes were built for degens and memecoins”. However, the fact remains that Bitcoin transactions are expensive. Even with the new platform’s improved efficiency, traditional memecoin distribution strategies like airdropping thousands of tokens could easily run up eye-watering transaction fees.
To truly realize the new standard’s potential, Runes needs to be integrated into Bitcoin’s various sidechains and Layer 2 networks. Luckily, developers have moved quickly to do so.
Bitcoin Ecosystem Embraces New Standard
Among the L2s looking to integrate the new protocol, B² Network announced RuneSwift on Thursday, April 24. The anticipated scaling solution claims to reduce gas fees for 10,000 Runes transactions from 6 BTC to just 0.002 BTC. But it isn’t the only platform looking to ramp up transaction capacity.
Although they have taken different technical approaches to the challenge, both Runic Chain and Rune Chain envisage a similar model.
Of course, sidechains that scale transactions while maintaining Bitcoin as the underlying consensus layer are hardly new. But with Runes, the pace at which platforms have moved to accommodate the new standard is unprecedented.
ICP Upgrade Focuses on Bitcoin DeFi
Before Runes went live last week, the Internet Computer (ICP) announced an upgrade designed to enable ICP smart contracts that can etch Runes, inscribe Ordinals and transfer BRC-20 tokens.
The upgrade is in line with Dfinity’s vision to make ICP the “Layer Zero for Bitcoin,” and could pave the way for increased cross-chain mobility for all kinds of Bitcoin-native assets.
ICP already supports a growing number of DeFi applications that grant users access to various derivatives and trading strategies that aren’t supported by the Bitcoin base layer.
As Dfinity’s Vice President of Growth Lomesh Dutta told CCN, the upgrade multiplies the possibilities for Ordinals, NFTs and Runes. He said: “Now you can really build the entire DeFi stack on top of them.
“If you want to trade them in a DEX, if you want to build liquidity pools or new lending products, all those DeFi principles can now sit on top.”
Runes naturally slots into this emerging “BTCFi” ecosystem. Within days of the protocol going live, multiple teams have already stated their intention to build custom DeXs for the new tokens.
Race to Build the First Runes DeX
The day before the new standard came out, Runes DeX announced the closure of a $2 million seed investment round to fund the development of a new Automated Market Maker (AMM) for Runes.
A similar announcement from Woo X soon followed, with the company stating its intention to launch BitGenie on the Bitcoin L2 Merlin Chain.
Meanwhile, established platforms originally built for Ordinals inscriptions have moved swiftly to incorporate the new tokens. For instance, DeXOrdi and BitX have both declared their intention to support Runes. Meanwhile, the race to start trading is now on.
