Bitcoin’s soon-to-be-launched “Rune” token standard will allow the premier crypto network to catch up with rivals in the DeFi space, asset manager Franklin Templeton predicted in a report on Monday.
rune promise
The company released fact sheet Expanding upcoming technology on Twitter that is scheduled to go live at the same time as the Bitcoin halving.
“Runes introduces a new token standard at layer 1 of Bitcoin, which improves on Bitcoin’s current alternative token standard (BRC-20s),” Franklin explained.
Rune – A new alternative token standard for Bitcoin pic.twitter.com/0VmlFbyKPc
— Franklin Templeton Digital Assets (@FTI_DA) April 15, 2024
A token is a blockchain-based asset that is distinct from the blockchain's native currency, such as Bitcoin's BTC or Ethereum's ETH. Until 2023, there was no way to mint tokens on Bitcoin's main blockchain, isolating Bitcoin from the many applications available on other chains, such as NFTs, stablecoins, and DeFi.
That changed in early 2023 with the rise of Ordinals, invented by Casey Rordamor. This protocol allows users to engrave unique identification numbers on individual Satoshis and embed arbitrary data into them to enable NFTs.
Bitcoin NFTs stood out from Ethereum and Solana NFTs in that the image data was embedded directly into the Bitcoin blockchain rather than on a centralized server.
How big will the loons get?
As of today, Bitcoin hosts a larger NFT market than both blockchains, according to Cryptoslam. In the past 30 days, his NFT trading volume for Ethereum was $462 million, while for Ethereum he was $296 million.
Later, a developer named Domo enabled BRC-20 tokens based on the Ordinals protocol, although the creator himself admitted that such tokens were highly inefficient.
Now re-created by Rordamor, Runes is designed to be much more efficient, requiring less blockchain-based data to move than BRC-20 tokens or Ethereum's ERC-20 tokens. . Other benefits of Runes include compatibility with the Lightning Network and increased transaction privacy.
“Bitcoin is well positioned to close the gap between its fungible market capitalization and that of other blockchains,” Franklin wrote.
Bitcoin's current market cap is $1.2 trillion, but the cap on fungible tokens is only $600 million. In contrast, Ethereum has a market capitalization of $378 billion, while its alternative tokens have a market capitalization of $499 billion.
“We are excited to see if Runes can do for the Bitcoin alternative token and DeFi markets what Ordinals has done for the Bitcoin non-fungible token market.” concludes the report.
