decrypt.co
Barely a month has passed since Runes’ blockbuster debut alongside the Bitcoin halving in April; and yet, the protocol’s subsequent failure to meet lofty benchmarks has led many to write the whole endeavor off as a misfire.
But could growing institutional excitement for Runes in East Asia signal a possible second act for the budding protocol?
While mainstream chatter around Runes has quieted in the West, buzz in Asia surrounding the protocol has only continued to snowball—particularly among institutional investors and more centralized building teams who see it as a more sophisticated riff on the theme compared to the earlier BRC-20 fungible token standard.
BRC-20 tokens, the first wave of Bitcoin meme coins, created heaps of organic excitement when they took crypto by storm in 2023, birthed from a makeshift tweak to Bitcoin Ordinals code. Their debut was chaotic, highly experimental, and decentralized—the perfect storm for success in the cryptosphere.
The Runes protocol, by contrast, was rolled out far more methodically, by a team of reputable engineers who focused on security, scalability, and easily navigable building tools. In fact, it came from the original creator of the Ordinals protocol, Casey Rodarmor, who believed he could make a better fungible token protocol than the one that riffed on his own earlier code.
That emphasis arguably hasn’t yet made much of an impression on degen traders. But investors in East Asia say it’s already made a world of difference to them.
“Runes is structured to potentially meet the stringent requirements of institutional investors, emphasizing scalability, efficiency, and security,” Ciara Sun, founder and managing partner of Asia-focused crypto investment firm C Squared Ventures, told Decrypt. “This alignment might make Runes more appealing to a broader institutional base.”
Some Asian investment firms, like the Hong Kong-based Newman Group, have already jumped headfirst into Runes. The company says it's actively pushing Runes development via portfolio companies like Xverse and Liquidium, given what the firm sees as Runes’ potential to become a fundamental infrastructure layer for the entire crypto industry.
“We believe Runes could end up being bigger than BRC-20, especially considering institutional interest,” Adrian Lai, Newman Group’s founder, told Decrypt. “Runes' technical advantages and potential for efficient cross-chain transactions could make it a preferred choice for institutions looking to access DeFi on Bitcoin.”
Some of crypto’s most prominent companies have already lined up behind the protocol. Leading cross-chain NFT marketplace Magic Eden launched a dedicated Runes platform in April. OKX, one of Asia’s top centralized crypto exchanges, has eagerly embraced the protocol; it was the first such exchange to offer zero-fee Runes trading.
Paige Xu, an investor at OKX, says Runes were almost perfectly designed to check every box on an institutional investor’s wishlist. She particularly noted the protocol’s unspent transaction output (UTXO) model, which allows tokens to interact far more seamlessly with crypto wallets, layer-2 networks, and DeFi apps than BRC-20 tokens or Ordinals inscriptions currently can.
“Runes has the right stuff—efficiency and a slim blockchain footprint—that institutions typically look for in tech, that can handle heavy demand securely,” Xu told Decrypt, adding that her personal views do not necessarily reflect that of her employer.
The investor noted, however, that Runes’ ascendancy to dominance via institutional support is far from a done deal.
“Adoption of Bitcoin-based tech like this is still pretty new, and a lot depends on how well we can educate and integrate these assets into the broader financial world,” she said.
In the days following its April 19 launch, interest in Runes soared; three days in, the protocol saw over a million transactions, according to on-chain data from Dune. Transaction volume then plummeted by as much as 90% in the following weeks, amid a broader cooling-off period across the crypto ecosystem.
In late May, however, activity on Runes more than tripled. For the first time ever, the total market capitalization of assets on the protocol hit $1 billion, according to GeniiData. That figure has since eclipsed $2 billion, indicating that Runes may be enjoying something of a comeback (despite being barely a month old).
There is no guarantee that institutional excitement about Runes will lead the protocol to dominate the crypto industry, as many once assumed. But if current sentiment in East Asia is any indication, then crypto’s largest players are coming to the conclusion that there is only one road to mainstreaming fungible Bitcoin tokens—and that road runs through Runes.
“If issuing fungible tokens on the Bitcoin blockchain is the right move, then deciding between Runes and BRC-20 comes down to which has a better chance of long-term viability and diversity,” MiXWeb3, the pseudonymous founder of the Runes China community, told Decrypt. “That makes the choice much clearer.”
Edited by Andrew Hayward