Can the Runes protocol become the new mainstream issue coin standard in the crypto market?

As we all know, the Ethereum ERC20 protocol dominates the cryptocurrency field. It not only promotes the development of the Ethereum public chain, making its smart contract platform the industry standard, but also fosters the prosperity of decentralized finance (DeFi) and provides new avenues for project financing.

In the face of this situation, emerging public chains are following Ethereum's successful model, attempting to establish their own token standards. To stand out in this competitive market, new public chains need to have two key elements: a sufficiently large market capitalization and an innovative issue coin protocol.

In the current environment, the Runes protocol seems to have the most potential to challenge the status of ERC20. Its advantages are mainly reflected in the following points:

1. Bitcoin, as its underlying asset, holds about 50% of the total market capitalization of the entire crypto market, providing a solid foundation for Runes.

2. The fair issuance mechanism of BRC20 inscriptions has gained recognition from the community, while Runes has made improvements and innovations based on this.

3. The Runes protocol combines the advantages of BRC20 and ERC20 while running on the Bitcoin mainnet, offering unique benefits.

Main Features of Runes Protocol

Runes uses the op_return field of UTXO to record information about operations such as token deployment, minting, and transfer. It allows token issuers to flexibly choose their issuance methods, which can be a completely fair launch similar to BRC20, or team reservations and institutional fundraising like ERC20, or even a combination of both methods.

Comparison between Runes and BRC20

• More flexibility: Runes supports multiple issuance models, which is beneficial for project parties to raise funds.
• Easy to operate: Runes do not require additional engraving transactions, reducing network burden and user costs.
• Concurrency capability: Runes supports sending tokens to multiple addresses in a single transaction, improving efficiency.

Comparison of Runes and ERC20

• Underlying asset: Runes is based on Bitcoin, which has a more solid foundation compared to Ethereum.
• Market position: ERC20 has a mature ecosystem, while Runes is still in its infancy.
• Growth Potential: Runes, as an emerging protocol, have greater room for growth and market attention.
• Fairness: Runes is compatible with the BRC20 fair issuance mechanism, in line with current market trends.
• Scalability: While the Bitcoin mainnet does not support complex smart contracts, Runes can achieve more functionality through Layer 2 solutions.

Technical Details of Runes Protocol

The Runes protocol enables the deployment, minting, and transfer of tokens by adding specific information in the op_return field of transactions. Various launch methods can be set during deployment, including full reservation by the project party, completely fair minting, or a combination of both. Minting and transfer operations are also completed by carrying relevant information in the op_return field in a similar manner.

Overall, the Runes protocol, as an emerging issue coin standard, combines the stability of Bitcoin with an innovative token issuance mechanism, demonstrating significant potential. However, to truly surpass ERC20 and become mainstream in the market, Runes needs to further improve its ecosystem to attract more developers and users. In the future, with the development of Bitcoin Layer 2 solutions, the Runes protocol may usher in broader application prospects.