20.12.2024
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Bitcoin has received praise for its robust security, decentralization, and immutability. However, from some market participants, this blockchain has endured criticism for its limited programmability.
Programmable runes promise to address that with the new Proto-Runes protocol, which aims to enable enhanced smart contract functionality on the Bitcoin blockchain. This could expand Bitcoin’s decentralized finance (DeFi) capabilities while upholding its design principles.
Read on to learn more about programmable runes on Bitcoin and how the developing Proto-Runes protocol aims to expand the programmability of the leading blockchain.
Programmable runes are a new protocol layer that aims to support smart contract-style functionality, decentralized finance (DeFi), and the creation and management of native tokens on the Bitcoin network.
The main objective of programmable runes is to introduce better flexibility akin to the Ethereum Virtual Machine (EVM) to Runes so that developers can deploy more use cases and native asset standards that were previously not possible on the Bitcoin network or were more complicated to implement.
The current Runes protocol is as programmable as Bitcoin. Furthermore, certain extensions of Bitcoin would enable new programmable features on the existing protocol.
In a post on X, Rodarmor gave examples of Runes' programmable features that would be extended by certain extensions of Bitcoin. One of these is OPCHECKTEMPLATEVERIFY, which could improve the process of runes' open-minting, ensuring that a user who bids and pays fees receives runes. This is not always the case now.
The creator of Runes also mentioned SIGHASH_GROUP, a Bitcoin upgrade that would offer more flexibility in broadcasting transactions and fee optimization. According to Rodarmor, this would help make the process of selling multiple runes from one UTXO (unspent transaction output) much easier and would simplify the process of moving runes onto Bitcoin’s Lightning Network.
Moreover, Rodarmor claims that standardizing the Taproot signature annex with a carve-out for unstructured data presents another enhancement layer. This would allow the creation of inscriptions in a single transaction, circumventing the current necessity for the commit/reveal scheme used by the Runes protocol. Such a change would streamline the process, making it more efficient and user-friendly.
The current Runes system still faces limitations that might be solved in the future. These include requiring multiple transactions for inscriptions and the complexity of managing runes across different platforms.
Proto-Runes is a sub-protocol of the Bitcoin Runes protocol for deploying more use cases on Bitcoin by enabling the creation and management of different apps and asset types on the network.
Once the sub-protocol is live, you should be able to generate proto-runes by burning runes.
A team of developers claims they have figured out a way of solving some of the current limitations by enhancing the capabilities of Runes using indexers. This team is deploying Proto-Runes, a sub-protocol of Runes that will facilitate the creation of custom indexers that assume the logic of Runes but provide additional logic to support a wider range of functionality and assets on Bitcoin.
The approach could bring automated market makers (AMMs), governance, escrow implementation, automated liquidity providers, synthetic assets, and more onto the network.
The Proto-Runes protocol is being presented by developers as another way to enable smart contract functionality on Bitcoin, allowing for the building of a wider range of assets and applications on top of Bitcoin's native assets.
Proto-Runes are created by burning, or destroying, runes, which is an irreversible process. However, this requirement could change in the future if, for example, the burn and mint process occurs directly between Runes and Proto-Runes. For this, additional upgrades are needed.
In either case, more detailed specifications of the Proto-Runes protocol are yet to be released, which would provide more insights into how the protocol works.
Programmable runes are another player in Bitcoin’s DeFi space and an attempt to expand the Runes ecosystem and, in turn, the Bitcoin ecosystem.
Like Layer 2 networks, which aim to facilitate a multi-faceted Bitcoin economy, programmable runes might play a role in enabling an ecosystem of various solutions, such as automated market makers, liquidity providers, governance, payments, and more.
Connect your wallet to the Sovyrn DEX to start buying and selling runes tokens.
