Tools
The Tools for Runes
Runes has become the new meta.
It went live on April 20th and within a week has already crossed $447M in total market cap.
We have covered Runes in previous newsletters. When we covered BTCfi on March 14th, we mentioned Runes as a big upcoming opportunity. And on April 4th, we shared how to prepare for Runes.
80/20 of Runes: Runes Protocol is a new fungible token standard for Bitcoin. And it is a much better standard than previous standards like BRC-20.
- It makes it much easier to create tokens.
- It removes reliance on off-chain data.
- It can be used on BTC L2s as well.
- It brings technical improvements like the more efficient UTXO-based model.
The creation of a new rune and its properties is called etching. Properties include name, symbol, and divisibility.
When a new rune is etched, there can be premined rune tokens, while the rest is available for minting. And like other fungible tokens, it will be possible to transfer and trade them. Creators can decide the conditions required for minting. Conditions may include factors like the number of times a rune may be minted, the start height in the block, and the end height in the block.
Runes is a new world with a lot of potential. To realize that potential, you need tools suited to this new world. Here's a list of top tools:
Wallets
Wallets are the gateway to any crypto ecosystem. Here are the best gateways to BTCfi:
- Unisat is a pretty good one.
- Xverse is usually the recommended wallet.
- OKX web3 wallet is said to have the best mobile experience.
Marketplaces
Once you have a wallet, you might want to buy a few Runes or Ordinals. MagicEden is probably the best marketplace to trade Runes. It has significant liquidity compared to others. The Unisat Marketplace is a good choice as well.
Runedex.com is aiming to be a Rune DEX. However, it isn't live yet and there aren't many details on it..
This is a real-time aggregator of different Bitcoin and Stacks assets. It covers Runes as well. You can track the following data for different Rune projects:
- Price
- Etching number
- Market capitalization
- Volume across different time periods: 1H, 6H, 24H, 7D
- Mint details such as premine, max supply, and remaining supply
RunesMarketCap is a similar website that tracks the price, market cap, volume, and supply of different Rune projects. However, it is not as comprehensive a source yet. They are still manually updating data.
Luminex offers foundational capacities such as Etching, minting, and transferring runes.
Its special feature is filtering. Luminex allows you to filter for runes using criteria such as time period and number of holders. Therefore, many people use it as their primary gem-finding tool.
It allows etching, minting, and transferring runes.
It also has a unique feature that allows users to create referral links for specific wallets. And if others use your link to mint rune tokens, you get 20% of the commission fee.
Their website claims they are working on a marketplace and DEX for Runes as well. I'm looking forward to what a Rune DEX might look like. As of right now, there isn't much information available on the project.
This is another app that does many things related to Runes:
- Like most other apps in this list, they have tools to help you etch, mint, and transfer runes.
- They offer a Rune explorer to track Rune projects. In my experience, it has one of the best UX for tracking transactions and wallets.
- They have a Rune marketplace for trading. But, it is very small. Last time I checked, the total market cap of assets listed was only ~$320.
- My favorite page is titled "cooking". This shows which Runes are hot right now. This is great for degens looking to spot trends and snipe runes.
Their documentation is a great place to learn more about them.
They also have multiple products.
- Portfolio. You can track your Runes tokens held, their current value, monitor change in value, and performance. You can also follow whale wallets, get alerts on them, and analyze them by grouping them.
- RuneMine Indexer. It'll allow you to view all historical Runes data. One unique feature is that it allows us to order Rune projects according to their etching number.
- Multi-sig wallets. They are security-focused wallets that require multiple parties to approve a transaction before it can be executed on a blockchain. It isn't live yet.
- Bridge. It isn't live either. Theoretically, it should allow you to transfer Rune tokens to other L1s such as Ethereum.
This bridge allows you to make kinds of transfers.
- Transfer Runes across Bitcoin and other EVM L1s.
- Transfer between Runes Protocol and the BRC-20 standard.
As of now, only three assets are supported. More assets will be supported in the future.
- RunesBridge
- SATOSHI•NAKAMOTO
- MEME•ECONOMICS
In the future, there'll be more bridges and more bridged runes. So, demand for runes will come from other L1 like Ethereum and BNB Chain.
It is a telegram bot designed for Bitcoin and Runes Protocol.
Through the bot, you can create, mint, buy, and sell runes via Telegram. But you cannot export the private key.
Runes Terminal is trying to become the go-to infrastructure provider for the Runes Protocol. Currently, they are building multiple products that aren't live yet:
- RunesEtch is a simple interface for creating your own Rune coin.
- RunesScan will be a Runes explorer that shares public data.
- RunesBook will be a go-to wiki for all information related to runes.
- RunesPad will be a launchpad for Rune projects.
As of now, it has the following features:
- Hottest mints in the latest blocks.
- Runes transaction & address tracker.
- A comprehensive index of Rune projects with their properties.
We have covered most of the top tools for Rune. Granted, the UX is still not normie-friendly. But by the time it happens, you'll likely have lost your edge.
Right now, you have enough tools to explore and compare the properties of various Rune projects. Here are some rules of thumb you might want to follow:
- A catchy name that can go viral is really important.
- Too few holders is a red flag, it means no one is actually buying.
- Too many holders can be a red flag as well. It might mean that it has already reached most of the Rune-buying market.
- An earlier etching number will probably be valued higher.
As usual, don't buy blindly. Right now, Runes are just complicated memecoins.
Sponsored By
Merlin Chain: The Leading BTC Layer 2
BTCfi's in the spotlight again because of the recent halving and Runes.
But BTCfi still has many drawbacks: Bitcoin doesn't have a rich dApp ecosystem and it doesn't have the scale to support this.
Enter Merlin Chain – the leading native Bitcoin L2.
While there are many BTC L2s out there, Merlin Chain has the most powerful tech stack backing it:
- Lumoz's decentralized ZK computing power network handles its zero-knowledge computations
- Polygon's ZK-tech powers its underlying infrastructure.
- Celestia powers the Oracle network for data availability.
All this is designed to unleash Bitcoin's potential.
Who's behind Merlin Chain? The Bitmap Tech team has deep roots in the Bitcoin ecosystem. They are already behind some of the most successful assets in BTCfi, such as BRC-420 and the Bitmap Metaverse. They also have over 20 institutional investors, including The Spartan Group and OKX Ventures.
EVM-compatibility. This allows the chain to benefit from various network effects built by the Ethereum VM. Existing EVM dApps can be copy-pasted to Merlin. It has the largest number of developers. And many additional opportunities like developer tools and libraries.
But it doesn't give up on its BTC roots either. Merlin supports BTC protocols such as BRC20, Atomicals, Runes, etc..
Merlin is well on its way to become a center of crypto activity. They already have 50+ dApps live on the chain. They've launched Merlin Seal, a stake-to-earn program, in order to attract liquidity. And the seal currently has more than $3.15B in TVL.
BTCFi is one of the hottest narratives right now, and Merlin Chain has positioned itself to dominate the space.
Protocol
Karak Network: The Hot New Restaking Protocol
Did you miss the EigenLayer farming train? Well, there's an interesting beta play for you.
Karak Network is a marketplace connecting protocols and users for crypto-economic security.
Alright, what is crypto economic security?
Crypto protocols usually need some kind of "service" from users. They usually get this by creating economic incentives through crypto assets.
For example, Ethereum needs users to validate transactions. If there are no validators, Ethereum breaks down. So, Ethereum creates economic incentives for validators by giving them $ETH as a reward. In return, users validate Ethereum and keep it secure.
This way of securing protocols is called crypto-economic security.
Usually, building crypto economic security is really difficult. Ethereum, for example, had to make $ETH valuable and create a big validator set.
Karak will reduce this level of difficulty. It will make crypto-economic security a commodity that can be bought.
How will Karak work?
At its core, Karak is a marketplace connecting stakers and protocols:
- Stakers use staked assets and "re-stake" into a protocol via an "operator."
- Protocols get the "services" they want from operators. These operators are backed by staked assets from users.
On behalf of restakers, operators will provide the "services" to protocols. Protocols will pay restakers "yield" for their service. If the services aren't delivered, the restaked tokens will be slashed.
The following flowchart can be used to visualize this properly.
Just a few weeks ago, restaking was synonymous with EigenLayer for many. But now, EigenLayer has a competitor.
There are significant differences between EigenLayer & Karak.
- Multi-asset restaking. EigenLayer only allows $ETH LST or native $ETH restaking. Karak will also allow other assets, such as stablecoins, LRTs, and Pendle tokens.
- Restake from anywhere. You can restake to EigenLayer from Ethereum only. Karak seemed to claim that users will restake from multiple chains in the future.
On the other hand, Karak is much more riskier.
- The EigenLayer team created the restaking sector. So, they know much more about it.
- Karak is accepting high-risk tokens like LRTs. If something happens to LRTs, the whole system might break down.
Recently, Karak launched its points program. So, Karak is experiencing rapid growth. It has already reached ~435 million in Total Value Locked.
Since you can use your LRT or Pendle tokens to restake on Karak, there aren't any big opportunity costs to farming it.
You need an invite code for Karak.
Start farming it before it gets too crowded.
🚀 DeFi Catalysts
Stacks, a Bitcoin L2, has started its Nakamoto upgrade. The full mainnet activation of the upgrade is expected between May 15-29.
Unibot has rebuilt its referral system, announced token buy-backs, and redesigned the reward dashboard.
Ondo Finance has partnered with Noble to bring native $USDY to Cosmos and IBC Protocol ecosystem. This can be a market for Noble to grow.
Jupiter Exchange acquired Ultimate Wallet, a self-custody wallet company. It is part of their Jupiter Mobile initiative.
LayerZero has created a framework for LRTs to add native minting on L2s easily. We can expect many LRTs to launch on L2s now.
🪂 Airdrop Alpha
Safe introduced Safe{Pass}, a reward program that converts Safe Smart Account usage into points.
Scroll, an Ethereum zk-rollup, has started its points program. For the first round, bridge ETH and wstETH via the native bridge and STONE using LayerZero.
Renzo Protocol has announced that they'll launch of $REZ on April 30th. Many people are disappointed in how they allocated tokens.
Solv Protocol will distribute 400 M Solv Points to SolvBTC stakers on Merlin. And Merlin chain will distribute 2 $MERL to SolvBTC stakers.
Lyra Finance has started LDX airdrop farming campaign. The two ways to farm are by staking $LYRA and trading perps & options on Lyra Finance.
📰 Industry News
Samurai Wallet's founders were arrested and charged with conspiracy to commit money laundering.
CZ, Binance founder and former CEO, is scheduled to be sentenced on April 30. The DOJ has sought a 36-month sentence for CZ.
Renzo Protocol's LRT, $ezETH, fell as low as $750 on Wednesday. There was masssive liquidations on Gearbox and Morpho.
ZKasino is in a controversy. Users deposited $33 M worth of $ETH to farm $ZKAS. Users were promised the 1:1 return of $ETH. However, they said they converted $ETH for $ZKAS and then deposed that $ETH to Lido.
🐦⬛ X Hits
- Renzo analysis of what happened.
- And follow up with the team on the solution.
- The correct way to treat attention economy.
- Grayscale is on the move for a spot ETH etf.
- Current Market conditions.
🧠 For the Nerds
Let the Rune Games Begin. This article is about the relevance of the Rune Protocol for the Bitcoin Network. With every halving, miner revenue drops 50%. So, the long-term sustainability of BTC is in question. Runes Protocol is bringing memecoin trading to BTC. And its fee is covering for the halving reductions.
A Framework for Evaluating DeFi UX. The author talks about the UX of using the product, how users learn to use the product, and how devs can make users feel safer when using DeFi protocols. While the target readers are builders, the framework can be used by investors as well.
Solana's fee-market fork in the road This is an in-depth look at Solana's fee market. Solana doesn't have a fee market. However, the increasing economic activity is exposing the problems of not having a fee market. The author argues that Solana will have to embrace fee markets, particularly as it relates to MEV is the best path forward.
😂 Meme
Until next time,
Edgy
Today's email was written by Edgy, Yayya, and Lorenzo.
DISCLAIMER: I'm NOT a financial advisor. This content is for education and information purposes only. Crypto and DeFi are risky and speculative. Please do your research before investing.
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