Bitcoin still lags behind Ethereum and Solana in terms of decentralized finance (DeFi). But this delay would be about to be filled thanks to the Runes token standard.
The Runes to allow Bitcoin to catch up with Ethereum and Solana
Can the Bitcoin blockchain catch up with Ethereum and Solana? Yes, this should happen thanks to the launch of Runes. At least that’s what investment company Franklin Templeton Digital Assets thinks. In a new report released on Monday, the investment firm claims that with the launch of a more efficient token standard (Runes), the Bitcoin blockchain can close the gap that separates it from Ethereum and Solana in terms of market capitalization.
The company explains that Runes brings in tokens that comply with BRC-20 standards. These are assets that are based on the blockchain, but which are different from the latter's original currency, bitcoin (BTC). It should be remembered that the Bitcoin blockchain only allowed the creation of tokens on its platform from 2023. Ordinals, a protocol invented by Casey Rordamor, opened the way to NFT on Bitcoin. This protocol made it possible to inscribe individual satoshis with unique identification numbers.
How important could the Runes become?
Currently, Bitcoin is home to a larger NFT market than its competitors. Over the last 30 days, it has processed an NFT transaction volume of $462 million, surpassing Ethereum's $296 million. However, despite this advancement, BRC-20 tokens, activated by developer Domo using the Ordinals protocol, were criticized for their ineffectiveness.
Runes, created by the same innovative mind Rordamor, are designed to be significantly more effective. They require less blockchain-based data to move than BRC-20 tokens, or even Ethereum's ERC-20 tokens. Other benefits of Runes include their compatibility with the Lightning Network and increased transaction privacy.
According to Franklin Templeton, Bitcoin is well positioned to close the gap between its total market capitalization and that of other blockchains. Currently, Bitcoin's market capitalization stands at $1.2 trillion, while its fungible token capitalization is just $600 million. On the other hand, Ethereum has a market capitalization of $378 billion, compared to $499 billion for the tokens.
The report published by Franklin Templeton expresses certain optimism about the potential impact of Runes on the Bitcoin token and DeFi market. Just as Ordinals revolutionized the NFT market on Bitcoin, Runes could well be the catalyst for a major evolution in the world of cryptocurrency.
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