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💡 Runes Standard on Bitcoin, Explained TL;DR: Runes aims to provide a simple, Bitcoin-native token system with a unique issuance model and efficient on-chain footprint — its UTXO (unspent transaction output) approach differing from standards like BRC-20. While BRC-20 is the most widely used token standard native to Bitcoin, other metaprotocols are catching up — offering new utilities, overcoming existing limitations etc. 📈 Runes is one such competitor. Runes is a new fungible token protocol proposed by Casey Rodarmor, the creator of Ordinals. Simply put, it is a UTXO-based system that aims for: → A smooth UX for Bitcoin users in creating and transferring tokens. → A smaller on-chain footprint with smart UTXO management. With Runes, token balances live inside UTXOs. A single UTXO can hold any amount of any number of Runes tokens. 💡 Issuing mechanism for Runes → Rather than tying balances to addresses, Runes tokens get issued directly into a UTXO in the issuance transaction. This sets the initial supply, ticker symbol, and number of decimal places. → From there, the UTXO holding the tokens can be split up and reorganized through regular transfers. → The issuer can send any quantity of their issued Runes to any number of recipients by creating outputs assigned to the token using the protocol message format. 💡 Differences from BRC-20 → A key difference is that Runes aligns closer to Bitcoin's native UTXO model, instead of something purposely bolted on like BRC-20. → Transfers rely on compact OP_RETURN messages rather than bespoke transaction types. This makes Runes more efficient with a smaller on-chain footprint. → The issuance mechanism is also more transparent, defined by a specific message format. → Another advantage is that Runes is inherently compatible with Lightning, unlocking new possibilities. 🧪 Ordiswap is the first native AMM on Bitcoin L1, supporting direct $BTC/BRC-20 swaps. 🤝 Our infrastructure allows us to support all major token standards — SRC-20, CBRC-20, DRC-20, Runes etc. 🧡 Runes are one that we are now specifically looking into, and we cannot be more excited about the potential of the BTC DeFi ecosystem in the coming months!

Introducing the #Bitcoin #Runes protocol! 💫 Runes offer a new standard for creating fungible tokens on the Bitcoin network. Let’s dig in 👇🧵