Rune Craze Resurfaces: DOG Leads the Way, When Will the Track Erupt?

1. Overview of Runes

At the beginning of 2023, the Ordinals protocol and the BRC-20 standard sparked a wave of BTC asset creation and speculation, promoting the development of BTC layer 2 and DeFi ecosystem infrastructure. However, this also led to congestion and data redundancy in the Bitcoin network. To address these issues, 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, the enthusiasm for the first batch of rune minting pushed the Gas fee on the BTC network above 1000 sats. Although market attention quickly shifted to other areas, DOG's recent price rise from the bottom to a new high has once again sparked interest in rune targets.

1. The mechanism of runes

The Runes protocol utilizes Bitcoin's native UTXO model to issue and track tokens, making it more native and decentralized. The rune balance is directly held by the UTXO, and a UTXO can hold any number of runes, avoiding the creation of "garbage" UTXOs, improving efficiency and reducing on-chain space usage.

Specifically, the data of Runes is stored in the OP_RETURN field, which is an opcode for Bitcoin transactions that allows 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 of uppercase letter R. Issuance or transfer transactions specify and allocate to UTXO in subsequent data pushes. Invalid protocol messages will result in the runes being destroyed.

2. Comparison of rune and BRC-20

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

( Runes are designed for fungible tokens, based on the native BTC architecture, not 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, taking up less space and reducing blockchain bloat.

)3( The Runes protocol is based on the UTXO model, integrates with the native architecture of BTC and inherits its security, offering stronger scalability, and is perfectly compatible with the BTC ecosystem development routes such as the Lightning Network and BTC L2.

) 3. The meaning of runes

has created a new way of issuing BTC assets, which helps to bring more attention and funds to the BTC ecosystem.

(2) is simpler, more efficient, and compatible compared to previous methods, reducing network congestion and seamlessly supporting various upgrades and ecological solutions of the BTC network.

( 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 network's security and sustainability.

2. Track Data Overview

According to BTC network data, runes currently account for about 20% of the total transaction volume on the network. When the protocol was first launched, transactions were very active, reaching a peak proportion of 81.3%, and then it declined. Currently, runes account for about 10-40% of the network.

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

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

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

In terms of fee contribution, the current proportion 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 proportion of rune reached as high as 70%. The speculation around rune has broadened the income sources for BTC network miners.

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

Compared to the market capitalization of meme coins on other chains, the market capitalization of meme coins on the Bitcoin chain accounts for the lowest proportion, less than 0.1% of that chain. In contrast, the leading meme coins on the ETH and SOL chains account for more than 3% of their respective market capitalizations. Considering BTC's market capitalization and mainstream capital attention, there is potential for its meme coin market capitalization to further expand.

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

3. Rune Assessment System and DOG Analysis

The rune project can be evaluated from three stages and nine dimensions:

• Early stage: Focus on distribution methods, degree of decentralization, founders and storytelling.
• Medium term: Focus on the continuity of dissemination and price continuity.
• Maturity phase: Focus on trading volume, market capitalization, chip structure, and price stability.

According to this evaluation system, the leading project in the current rune track is DOG:

1. Distribution method: phased issuance, bearing all on-chain costs, with comprehensive design considerations.

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

2. Degree of dispersion: The number of early common stakeholders is large and of high quality, achieving rapid cold start and widespread dissemination.

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

3. Founders and Storytelling: The founder is a seasoned member of the BTC community, and the project design is artistic and topical.

4. Continuity of dissemination: The founder has a strong influence in the community and continues to attract market attention.

5. Price Continuity: Rune Stones and Rune DOG are being speculated in succession, showing an upward price trend.

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

6. Trading Volume: The trading volume in rune contracts is far ahead, with the best liquidity.

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

7. Market Cap: Overall ranked first.

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

8. Chip structure: The number of holders is large, but the degree of chip dispersion is relatively high.

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

9. Price Stability: Price stability is on the rise, with strong buying power.

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

IV. Conclusion

1. The rune protocol is technically simpler, more efficient, and compatible than BRC-20. It has surpassed BRC-20 tokens in terms of trading share and fee contribution, becoming an important new asset form.

2. Runes currently mainly serve to enhance the attractiveness of the Bitcoin network as a meme coin, which has significant potential for sustainable development, but has not yet fully erupted and still has room for price discovery.

3. DOG is in a leading position in the rune track, but the chip structure is relatively dispersed, and it may take some time to accumulate before landing on a top-tier exchange.

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