Beyond serving as mere value repositories, the Bitcoin blockchain system is experiencing growing interest due to Decentralized Finance (DeFi) and Non-Fungible Token (NFT) transactions occurring within it. Notably, investment firm Franklin Templeton posits that the introduction of Runes, a fresh fungible token standard for Bitcoin, could significantly transform the ecosystem.
According to Franklin, Runes could assist Bitcoin in narrowing the difference between itself and Solana and Ethereum in the market for interchangeable digital assets. To elaborate, Franklin stated:
“At present, the market for fungible tokens based on Bitcoin is much smaller than those of Ethereum and Solana. Yet, with the introduction of a more efficient token standard (Runes), Bitcoin has a good chance of narrowing the difference between its fungible market value and that of other blockchains.”
In response to Franklin Templeton’s tweet stating their $1.4 trillion in assets under management, a Runestone spokesperson named Leonidas commented: “Franklin Templeton is confident about Runes with such a large portfolio. I have a feeling many of you will take a neutral position on this.”
With $1.4 trillion in assets under management, Franklin Templeton is optimistic about Runes, although I imagine many of you may take a more cautious approach and sit on the sidelines of the curve.
— Leonidas (@LeonidasNFT) April 15, 2024
Previously, Franklin Templeton acknowledged the significance of the BRC-20 standard in the rapid growth of interchangeable tokens on the Bitcoin blockchain. Nevertheless, the company expressed concern over the excessive generation of unused UTXOs, or Unspent Transaction Outputs, resulting from the burn and minting procedures of the BRC-20 standard.
In Bitcoin, UTXOs (Unspent Transaction Outputs) can cause network congestion and increase transaction fees since some small bits of Bitcoin may remain unused even after a transaction is completed. As a result, these leftover funds become part of subsequent transactions, accumulating over time.
Runes Protocol to Solve the UTXO Problem
According to Franlink Templeton Digital Assets, the introduction of the Runes protocol will bring about enhancements and get rid of unnecessary UTXOs (Unspent Transactions Outputs). This new protocol on Bitcoin Lightning will lessen the reliance on external data or extra tokens, all while ensuring enhanced privacy and compatibility.
Runes are not the only new digital assets piquing Franklin Templeton’s curiosity. This month, the company expressed admiration for Ordinals, which they believe have sparked a “revival in Bitcoin usage.” They specifically mentioned NodeMonkes, Runestone, Bitcoin Puppets, Ordinal Maxi Biz, and Bitmap, with a combined market capitalization of $1.11 billion. Previously, Franklin Templeton’s Digital Assets team had acknowledged:
Over the past year, there has been a surge of activity in Bitcoin’s innovation and development scene. The main drivers of this positive momentum come from various new initiatives, including Bitcoin NFTs like Ordinals, the emergence of new fungible token projects such as BRC-20 and Runes, the growth of Bitcoin Layer 2 solutions, and other decentralized finance (DeFi) building blocks for Bitcoin.
As the Bitcoin halving in 2024 approaches within the next few days, there has been a notable correction among BRC-20 tokens. For instance, the ORDI token price has decreased by approximately 40% over the past seven days.
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2024-04-16 13:33