Casey Rodamor, the creator of the Ordinals protocol and reference implementation, recently proposed a replacement to the BRC-20 fungible token protocol called Runes. Within just seven hours, basic implementations were live and people were already minting tokens, based on a blog post that vaguely described the concept without a detailed specification or concrete design.
The proposal specified how to handle token movement and allocations using a simple approach: using OP_RETURN in each transaction to assign tokens to a specific UTXO with an output index, a token amount field, and a token ID number. The protocol also uses a special message to issue a token initially by assigning the entire balance in the issuance transaction. In essence, this is the entirety of the proposal so far.
Casey created this proposal for Runes because the existing BRC-20 protocol, which uses Inscriptions, is messy and inefficient. BRC-20 was adopted without any rational or logical engineering reason, simply because Inscriptions were trendy. Unlike BRC-20, other protocols like Counterparty (XCP), OmniLayer (OMNI), and now Runes can achieve the same token issuance and transfer on the Bitcoin blockchain in a single transaction instead of two.
BRC-20 tokens also suffer from Inscription numbering issues, which complicates their validation and requires manual interventions in the protocol. Casey proposes doing away with the current numbering scheme entirely to eliminate the need for manual interventions. However, some counterarguments stem from users who do not want the numbers of their inscriptions to change for various reasons.
Runes, unlike BRC-20, avoids on-chain inefficiency and the ongoing debate about Inscription numbering. Nevertheless, there is a concern that people are hastily implementing Runes without careful long-term planning or design considerations, repeating the mistakes made in the Ordinals ecosystem’s numbering debate. Both Ordinals and Runes face scalability limitations similar to those of Bitcoin, but they have more flexibility to scale off-chain.
Unlike Bitcoin, protocols like Runes and Ordinals can easily adapt and introduce new functionality at the base layer without requiring changes to the Bitcoin network. Users can interpret arbitrary data against imaginary rule sets for these meta-protocols, enabling the implementation of features like Solidity for Runes tokens or Zero Knowledge Proof schemes for ZK Rollups.
It is crucial to decide whether to hastily build without considering long-term consequences or to prioritize sustainable and scalable infrastructure and tools in the Ordinals space. Casey’s proposal for Runes challenges the community to think critically and plan for the future.