From ERC20 to Runes: The Evolution of Crypto Assets Issuance Protocols

The ERC20 protocol of Ethereum, as the primary issuing standard in the field of Crypto Assets, plays a key role in the development of the industry. It not only drives the success of the Ethereum public chain but also paves the way for the rise of decentralized finance (DeFi). Furthermore, the ERC20 protocol has facilitated the formation of a decentralized financing and entrepreneurial ecosystem, making the investment and financing processes more direct and efficient.

Currently, many emerging public chains are trying to replicate the successful model of Ethereum and are striving to establish their own token standards. To achieve this, two key factors are usually required: first, the new public chain must have a sufficiently large market capitalization to establish a solid market position; second, the issue coin protocol needs to be innovative rather than simply copying ERC20, in order to gain recognition from users and the community.

Among many competitors, the Runes protocol demonstrates the potential to surpass ERC20. Its advantages are mainly reflected in the following aspects:

1. Based on the Bitcoin network: Bitcoin accounts for nearly 50% of the share in the Crypto Assets market, providing a solid foundation for Runes.

2. Innovative issuance mechanism: Runes inherits the fair launch concept of BRC20 inscriptions and has received broad support from the community.

3. Protocol Design: Runes has been optimized based on BRC20, integrating the advantages of ERC20, while serving as an asset protocol on the Bitcoin mainnet, which offers unique advantages.

The core features of the Runes protocol include using the UTXO's op_return field to describe token operations and information. It supports multiple issuance models, allowing for both completely fair launches and reserving some tokens for the team to use for financing.

Compared to BRC20, Runes is more flexible and supports team fundraising; transactions are more convenient without the need for additional engraving steps; and it supports concurrent transactions, improving efficiency. In comparison to ERC20, Runes is based on the Bitcoin network, providing a more solid foundation; as an emerging protocol, it has greater development potential; and it is also compatible with fair launch mechanisms, aligning with current trends in the Crypto Assets market.

Although ERC20 has a first-mover advantage in ecosystem and commercial applications, Runes hopes to achieve similar Turing-completeness to Ethereum through integration with Bitcoin Layer2 solutions such as BEVM, thereby supporting more complex business logic.

The Runes protocol offers flexible options for token deployment, issuance, and transfer. During deployment, you can choose to have full control by the project party, a completely fair launch, or a hybrid model. The issuance process is subject to preset conditions, while transfers are implemented through UTXO and the op_return field.

In general, the Runes protocol, as a new generation issue coin standard, demonstrates the potential to surpass ERC20. It combines the stability of Bitcoin, the innovation of fair launch, and compatibility with the existing ecosystem, and is expected to occupy an important position in the future Crypto Assets market.