Casey Rodarmor, the inventor of Bitcoin Ordinals, has proposed a new Bitcoin-based fungible token protocol called “Runes” as an alternative to the BRC-20 token standard. The BRC-20 standard, launched by an anonymous developer known as “Domo,” has gained popularity, with a market cap of $1 billion within two months. However, Rodarmor argues that BRC-20 tokens spam Bitcoin with “junk” Unspent Transaction Outputs (UTXOs).
BRC-20 tokens are based on the Ordinals protocol and allow the minting and transfer of fungible tokens on Bitcoin. Rodarmor’s main issue with BRC-20 tokens is their impact on UTXO proliferation, and he suggests that Runes, as a UTXO-based alternative, could address this problem.
In a Twitter post, Rodarmor stated that if Runes had a small on-chain footprint and encouraged responsible UTXO management, it might serve as a harm reduction measure compared to existing protocols.
Unspent Transaction Outputs (UTXOs) represent the amount of cryptocurrency left in a wallet after a transaction. Bitcoin’s UTXO model helps prevent the double-spending problem and contributes to the transparency and auditability of the Bitcoin ledger.
While Rodarmor acknowledges that many fungible tokens are scams or memes, he believes that the right fungible token protocol could add value to the Bitcoin network. Trevor Owens, co-host of The Ordinals Show, offered a $100,000 investment from the Bitcoin Frontier Fund to developers who can create a working Rune application, further supporting Rodarmor’s proposal.
It’s worth noting that the proposal is in the early stages, and it remains to be seen whether Runes will gain traction as an alternative to existing Bitcoin-based token standards.