Crypto glossary

Runes protocol

Definition

Runes is a protocol for fungible tokens on Bitcoin that stores token data in OP_RETURN outputs; it launched at the April 2024 halving as a BRC-20 alternative.

Created by Casey Rodarmor, who also designed Ordinals, Runes records token actions in small messages called runestones inside OP_RETURN outputs. Balances are attached to UTXOs, so tokens move with ordinary Bitcoin transactions instead of the separate inscription files BRC-20 needs. Creating a token is called etching, and etchings can define open mints that anyone can join.

Runes went live at block 840,000, the April 2024 halving block, and demand to etch and mint the first tokens was so intense that the block paid around 37 BTC in fees, a record at the time. Fees stayed elevated for days, and wallets, exchanges and marketplaces added Runes support. The design was praised for creating less UTXO clutter than BRC-20.

After the launch frenzy, activity and prices of most runes fell sharply, as with many memecoin waves. Like Ordinals, Runes depends on indexers that interpret the protocol rules; Bitcoin nodes see only ordinary transactions. Users need wallets that understand Runes to avoid accidentally spending or burning tokens.

Example

A user mints a rune during an open mint by sending a Bitcoin transaction with a runestone; the newly minted tokens are attached to an output in their Taproot wallet and can be sold on a marketplace.

Related terms

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