BRC-20 tokens have been the talk of the Bitcoin space over the last year, as the Ordinals protocol that let users inscribe NFT-like assets on the chain could also be used to launch fungible tokens. But a new Bitcoin fungible token standard called Runes is on the horizon, and leading wallet Xverse is gearing up to support it.
The Runes protocol, developed by Ordinals protocol creator Casey Rodarmor, is designed to provide a more efficient way to mint and transact fungible tokens deployed on Bitcoin. The protocol is set to debut on mainnet alongside the Bitcoin halving in April.
On Thursday, Xverse announced that it has added testnet support for Runes as it anticipates next month’s mainnet launch. Xverse users will be able to interact with Runes token and Runes-based apps on testnet in the meantime, with Xverse planning to support Runes on mainnet as soon as the protocol is deployed.
"We're very excited to be the first wallet that offers full support for the highly anticipated Runes protocol,” Xverse founder and CEO Ken Liao said, in a release. “With this testnet support launch, builders can start testing their Runes apps and seed the growth of a new Bitcoin layer-1 ecosystem.”
The BRC-20 token standard, built on top of the Ordinals protocol, started off as an experiment that quickly exploded in interest, yielding multiple tokens that sit in the top 100 most valuable cryptocurrencies by market cap.
But there have been issues along the way, Liao told Decrypt.
BRC-20 token transactions require a separate Ordinals inscription for each action, which has flooded the network, plus they yield unspent transaction outputs (UTXOs) that pile up on Bitcoin nodes.
There have also been inconsistencies between various BRC-20 token indexers, which track how many tokens have been minted, potentially causing issues for traders and platforms. Many of the prominent BRC-20 developers and platforms have attempted to band together to rectify such issues, as with the recently announced Layer 1 Foundation.
But the Runes protocol, which has Ordinals creator Rodarmor’s own “official” stamp, claims to deliver a more efficient and elegant riff on the same concept. And Runes won’t need an indexer. The protocol is set to launch to mainnet at the same time as next month’s halving, the event that happens approximately every four years and cuts the amount of Bitcoin miner rewards in half.
Xverse already supports an array of Bitcoin-related assets and linked protocols, including Ordinals, BRC-20 tokens, rare satoshis, and the Stacks layer-2 network. Liao said that it was also the first Bitcoin wallet that enabled users to connect to a website, akin to MetaMask on Ethereum, to interact with apps.
Adding Runes support—initially on testnet, but eventually on mainnet—is the next step in embracing all that Bitcoin has to offer amid the ecosystem’s rapid expansion over the last year-plus. Elizabeth Olson, Xverse’s Head of Growth, told Decrypt that she believes that Runes being part of Rodarmor’s concept for Bitcoin’s evolution will be key to the protocol’s success.
“It’s his vision of how he's seeing this come together,” she said. “Obviously, Ordinals have been a huge success, so I would imagine that Runes will be just as big, if not bigger than BRC-20 tokens.”
Edited by Stacy Elliott.