The inventor of Bitcoin Ordinals, Casey Rodarmor, has proposed a new Bitcoin-based fungible token protocol as a potential alternative to the BRC-20 token standard. The BRC-20 standard, launched in March by an anonymous developer known as “Domo,” has rapidly gained popularity, with a market cap of over $1 billion within just two months. Notable BRC-20 tokens created on Bitcoin include PEPE and ORDI.
However, Rodarmor argues that BRC-20 tokens have a significant drawback in that they create an abundance of “junk” Unspent Transaction Outputs (UTXOs) on the Bitcoin network. To address this issue, Rodarmor has proposed a new protocol called Runes, which is UTXO-based and aims to minimize UTXO set proliferation.
In a post on September 25, Rodarmor explained that UTXO-based protocols are a better fit for Bitcoin and promote UTXO set minimization by avoiding the creation of unnecessary UTXOs. He believes that if Runes had a small on-chain footprint and encouraged responsible UTXO management, it could serve as a harm reduction compared to existing protocols.
UTXOs play a vital role in Bitcoin’s auditable and transparent ledger by preventing the double spending problem. Rodarmor criticizes other fungible token protocols on Bitcoin, such as Really Good for Bitcoin, Counterparty, and Omni Layer, pointing out their individual issues.
While acknowledging that the majority of fungible tokens are associated with scams and memes, Rodarmor believes that a well-designed fungible token protocol can bring significant benefits to the Bitcoin network, including transaction fee revenue, developer mindshare, and more users.
During a Twitter Spaces discussion on September 25, Rodarmor mentioned that he came up with the Runes idea recently and wasn’t sure if he would pursue it further. However, shortly after the conversation, 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, providing support for Rodarmor’s proposal.
Cointelegraph reached out to Rodarmor for comment but has not received an immediate response.
In conclusion, Casey Rodarmor is proposing the Runes protocol as a UTXO-based alternative to the BRC-20 token standard. He believes that this new protocol could address the issue of UTXO proliferation and bring various benefits to the Bitcoin network.