The Rise of Rune Protocol: DOG Leads a New Wave of Excitement, When Will the Track Experience an Outbreak?

1. Introduction to Rune Protocol

In September 2023, Casey Rodarmor, the founder of the Ordinals protocol, proposed the Runes protocol, aimed at building an alternative token protocol based on BTC UTXO. The protocol was officially launched on April 20 this year during the Bitcoin halving, initially causing a huge surge in interest, pushing BTC network Gas fees above 1000 sats. Subsequently, market attention shifted to other areas until recently, when the price of DOG runes skyrocketed, reigniting interest in the rune sector.

1. The operation mechanism of rune

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

Specifically, the data of Runes is stored in the OP_RETURN field, allowing 80 bytes of data to be stored in the transaction output. Transactions use the OP_RETURN tag followed by the data push of the uppercase letter R. Issuance or transfer transactions are specified and assigned to UTXO in subsequent data pushes. Invalid protocol messages will result in runes being destroyed.

2. Rune and BRC-20 Comparison

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

(1) Designed for fungible tokens, based on the native BTC architecture, without relying on off-chain data, requiring only one minting, making it simpler and more efficient.

( Data is stored in an 80 bytes OP_RETURN field, occupying less space and reducing blockchain bloat.

) Based on the UTXO model, it integrates with the native BTC architecture and inherits its security. In the future, it can perfectly integrate with the ecological development routes of the Lightning Network, BTC L2, and more.

( 3. The meaning of rune

)1### has created a new BTC asset issuance method, attracting more attention and funds into the BTC ecosystem.

( is simpler, more efficient, and more compatible than before, reducing network congestion, and in the future, it can seamlessly integrate with various upgrades and ecological solutions of the BTC network.

) helps to address the security budget issue of Bitcoin, providing miners with new sources of income, while maintaining the network's security and sustainability.

2. Track Data Overview

From the BTC network data, runes currently account for about 20% of the total network transaction volume. When the rune protocol was first launched, the transaction share reached as high as 81.3%, and then it entered a cooling period, currently fluctuating between 10-40%.

Compared to runes and BRC-20, runes have become the most active L1 asset outside of BTC transactions, with a ratio of approximately 4:1. The highest proportion of runes occurred during the halving launch, at around 99%, while the lowest was about 55%.

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

When comparing the market capitalization of meme coins across different chains, the market share of meme coins on the Bitcoin chain is the lowest, accounting for less than 0.1% of that chain. The leading meme coins on the ETH and SOL chains each account for more than 3% of their respective chain's market capitalization. As the chain with the highest consensus, market value, and mainstream funding attention, Bitcoin's meme coin market capitalization has further room for expansion.

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

3. Rune Evaluation System and DOG Analysis

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

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

The current leader of the rune track is DOG:

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

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

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

4. Continuity of Communication: Founder Leo has strong communication skills and resources, continuously capturing market attention.

5. Price Continuity: Rune stones and Rune DOG are being speculated in succession, with prices continuing to rise.

6. Trading Volume: Significantly ahead of other runes, with the best liquidity. Current daily trading volume exceeds 70 million USD.

7. Market Value: Overall ranked first.

8. Chip structure: The number of holders is large, but the chips are not concentrated enough. The number of on-chain holders remains stable at over 70,000.

9. Price Stability: Price stability is on the rise, with further gains after consolidation at key levels.

4. Summary

1. Runes are protocols specifically designed for fungible tokens, technically simpler, more efficient, and compatible than BRC-20, surpassing BRC-20 tokens in terms of trading share and fee contribution.

2. Runes currently mainly serve to enhance the attention and capital capture of the Bitcoin network as meme coins, holding significant potential for ongoing development, but have not yet fully exploded and still possess price discovery potential.

3. DOG is in a leading position compared to other rune assets, but its chip structure is relatively scattered, and it may take some time to accumulate before landing on top exchanges.