Bitcoin Ordinals Creator Proposes New Fungible Token Protocol as Alternative to BRC-20

The creator of Bitcoin Ordinals, Casey Rodarmor, is suggesting a new Bitcoin-based fungible token protocol called "Runes" as a potential alternative to the BRC-20 token standard. The BRC-20 standard, launched earlier this year by an anonymous developer known as "Domo," has quickly gained popularity with a market capitalization of $1 billion within just two months. However, Rodarmor argues that the BRC-20 tokens spam the Bitcoin network with unnecessary UTXOs (Unspent Transaction Outputs).

What's Wrong with BRC-20 Tokens?

Rodarmor explains that the issue with BRC-20 tokens is their tendency to create an excessive number of UTXOs, which he refers to as "junk." He suggests that protocols based on UTXOs, like Runes, fit more naturally into the Bitcoin ecosystem and promote UTXO set minimization. By avoiding the creation of unnecessary UTXOs, Runes aims to provide a solution to the UTXO proliferation problem.

Potential Benefits of Runes

Rodarmor acknowledges that the majority of fungible tokens are often associated with scams and memes. However, he believes that a well-designed and responsible fungible token protocol could bring significant transaction fee revenue, developer engagement, and user adoption to the Bitcoin network. If Runes can achieve a small on-chain footprint and encourage responsible UTXO management, it could serve as a harm reduction method compared to existing protocols.

Opportunity for Developers

Trevor Owens, co-host of The Ordinals Show, has expressed interest in supporting the development of the Runes protocol. He has offered a $100,000 investment from the Bitcoin Frontier Fund to the first team that can create a functional Rune indexer, issuance, and/or transfer application. The goal is to further explore and develop Rodarmor's proposal for Runes.

Is Runes the Future of Fungible Tokens?

Rodarmor remains skeptical about the overall credibility of fungible tokens, stating that "99.9% are scams and memes." However, he recognizes their popularity and acknowledges that they are unlikely to disappear anytime soon. As for the future of Runes, Rodarmor has not yet made a final decision on whether he will pursue its development. However, the offer of financial support from the Bitcoin Frontier Fund may incentivize further exploration of the Runes protocol.

Cointelegraph reached out to Rodarmor for comment but has not received an immediate response.