The well-known Magic Eden platform announces the launch of Magic Eden Runes Protocol, to manage and create Runestones in an easy way using its web services.
The Bitcoin ecosystem is on the cusp of a significant innovation with the launch of Magic Eden’s platform for the Runes Protocol, a new fungible token standard on Bitcoin. This development marks a pivotal moment in the evolution of Bitcoin, offering new opportunities for the creation and trading of digital assets.
magic eden, recognized Initially launched for its NFT marketplace, it has expanded its offering by launching a platform dedicated to Bitcoin’s Runes Protocol. This platform, which entered beta on April 22, 2024, allows users to trade for BTC and buy Runes and Ordinals using their Magic Eden wallet. This launch is notable not only for its anticipation, being completed ahead of schedule on April 23, but also for its integration of innovative features designed to improve the user experience.
Magic Eden’s Runes platform introduces a feature called “Swaps View,” which allows users to set a specific amount of BTC they wish to spend when purchasing Runes. This feature simplifies the process of acquiring Runes, making the platform accessible to both newbies and veterans in the cryptocurrency space.
Runes Protocol, the newcomer to Bitcoin with the halving
Runes Protocol is an innovation in the Bitcoin blockchain that introduces a new standard for the creation and management of fungible tokens. This protocol was developed by Casey Rodarmor, who is also the creator of the Ordinals protocol, a technology that allows for the creation of NFT-like inscriptions on the Bitcoin blockchain.
Runes aims to offer a more efficient and simplified way to issue fungible tokens in Bitcoin, improving on the previous design of BRC-20 tokens, which are based on Ordinals theory, but can result in a proliferation of UTXO (Unspent Transaction Output) that overloads the Bitcoin network.
Runes Protocol was activated on the Bitcoin blockchain following the fourth Bitcoin halving event, which halves the block reward for miners and happens roughly every four years. This protocol specifically launched at block #840000, an event that took place on April 20, 2024. The choice of this time to activate Runes has no direct operational significance for the functioning of the protocol, but it adds an element of excitement around the Bitcoin halving event, which is widely anticipated within the cryptocurrency community.
The implementation of Runes on the Bitcoin chain represents a step forward towards expanding Bitcoin’s utility. One that allows for the creation of fungible tokens more easily and efficiently, potentially attracting a broader audience to the Bitcoin ecosystem, including developers and users interested in community-driven projects like meme coins.
How does the Runes Protocol work?
Runes Protocol integrates with the existing UTXO (Unspent Transaction Output) model in Bitcoin. In this model, transactions consist of inputs and outputs; a transaction uses the output of a previous transaction as input, and upon completion, consumes this input and generates a new output (UTXO), which indicates how much bitcoin is available for future transactions and prevents double spending.
To issue fungible tokens, Runes uses Bitcoin’s OP_RETURN function, which sends a data payload that allows the token supply, ID, and output to be designated to a specific UTXO without affecting the network’s functionality. The token supply defines how many Rune tokens the specific UTXO can hold, while the ID is the Rune’s numerical identifier. When initiating a transfer, the UTXO is split into multiple UTXOs with different amounts of Rune, allowing Rune balances to be tracked.
A distinctive feature of the Runes protocol is its ability to store data directly on-chain via OP_RETURN without congesting the UTXO set, as these outputs are provably unspendable. A single OP_RETURN output encodes all Rune messages (Runestones) in a transaction, including burning, transfer, and token minting. Malformed Runestones, known as Cenotaphs, result in all Runes in a Cenotaph transaction being burned, which differentiates Runes from the BRC-20 standard, which can generate a lot of garbage on-chain.
Benefits for Magic Eden users
The arrival of Runes Protocol opens the doors for Bitcoin to now be able to support fungible tokens beyond Bitcoin itself. But at the same time, it opens the doors for platforms like Magic Eden to be able to amplify the reach of Bitcoin and all its capabilities. In this way, users benefit from a secure and reliable platform for the launch of their own Rune tokens, with the ability to name, set terms, and manage these tokens.
Added to this is the integration with the Lightning Network and the use of Bitcoin features for on-chain data storage, allowing for faster and less costly transactions, improving the overall user experience.
The launch of Magic Eden’s Runes platform thus marks a milestone in the Bitcoin ecosystem, offering a new standard for fungible tokens and opening new avenues for the creation and trading of digital assets. With innovative features and deep integration with Bitcoin technology, the platform promises to be a valuable resource for users interested in exploring the potential of Runes and Ordinals on Bitcoin.
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