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Can the Runes protocol surpass ERC20? The potential and challenges of Bitcoin issuance standards.
Comparison of the Development of ERC20 and the Emerging Runes Protocol
The ERC20 protocol of Ethereum, as the leading token issuance standard in the cryptocurrency field, has brought about significant changes to the entire industry. It has not only propelled the development of the Ethereum public chain, making it the most widely used smart contract platform, but also fostered the prosperity of decentralized finance (DeFi), providing project parties with a more direct and efficient financing channel.
However, as the industry continues to evolve, emerging public chains are seeking breakthroughs, hoping to replicate the success of Ethereum. To stand out in this competitive market, new public chains need to possess two key elements: a sufficiently large market capitalization to solidify their position, and an innovative token issuance protocol to gain recognition from users and the community.
In this context, the Runes protocol, as an emerging token issuance standard, shows potential beyond ERC20. Its advantages are primarily reflected in the following aspects:
Strong market capitalization foundation: Runes is built on the Bitcoin network, and Bitcoin's market capitalization accounts for half of the entire cryptocurrency market, providing a solid foundation for Runes.
Innovative issuance mechanism: Runes inherits the fair launch concept of BRC20 while integrating the advantages of ERC20, achieving asset issuance on the Bitcoin mainnet and gaining wide recognition.
Flexibility: Runes supports various issuance methods, allowing for a completely fair launch similar to BRC20, or reserving a portion of tokens for the team for fundraising like ERC20.
Efficiency Improvement: Compared to BRC20, Runes' UTXO-based op_return design does not require additional inscription transactions, reducing network burden and user costs.
Concurrency: Runes allows for batch sending of tokens to multiple addresses in a single transaction, improving transaction efficiency.
Nevertheless, ERC20 still has the first-mover advantage and a mature ecosystem. Runes, as an emerging protocol, although it has greater growth potential and a sense of the times, still needs time to establish its own business loop and application ecosystem.
It is worth noting that the deployment, minting, and transfer operations of the Runes protocol are achieved by adding specific op_return data to Bitcoin transactions. This design preserves the security of the Bitcoin network while providing flexible options for asset issuance and management.
With the development of BTC Layer 2 solutions, Runes is expected to achieve more complex business logic and application scenarios while maintaining the security of the Bitcoin network. This provides a broad prospect for the future development of Runes.
Overall, the Runes protocol, as an innovative asset issuance standard, combines the stability of Bitcoin with the flexibility of new technologies, and has the potential to occupy an important position in the future cryptocurrency market. However, whether it can ultimately surpass ERC20 to become the mainstream token issuance protocol still requires time and market testing.