A new digital commodity protocol based on Bitcoin, called the Runes Protocol, created by Casey Rodamor, is set to make waves in the cryptocurrency world. This innovation has generated great excitement among crypto enthusiasts.
Yet, it’s important for potential investors to keep in mind the cautionary words of DeFi researcher and market expert DeFi Ignas. He advises carefully considering several potential downsides before getting carried away by the excitement of DeFi’s upcoming launch on Friday.
Rising BTC Transaction Fees And NFT-Like Trading Mechanisms
In a recent update on X, formerly known as Twitter, DeFi Ignas shares some valid concerns worth considering for now.
A researcher is noting the present excitement in the pre-rune token community. Tokens such as Runestone, RSIC, and PUPS have seen price increases and are offering anticipated airdrops of the upcoming Rune token to their owners.
Yet, DeFi Ignas warns that the current market buzz resembles the NFT craze, but reminds us that this enthusiasm might not last long. Furthermore, he advises that escalating Bitcoin transaction costs could create hurdles for small investors, possibly resulting in disappointment.
In simpler terms, Ignas of DeFi points out that at first, the Runes Protocol might not significantly change how you trade BRC20 tokens due to its similarities in foundational trading methods and NFT-like user interfaces.
A researcher raises doubts that the Rune Protocol will provide more effective token swapping than BRC20 tokens. Additionally, with a large number of Rune tokens expected to enter the market soon, traders’ focus might get spread thin, potentially reducing the amount of money flowing into each token.
DeFi Ignas points out the distinctive characteristic of Rune 0 (UNCOMMON•GOODS), which can be minted at no cost for four years but only once per transaction, implying that it might not be a simple investment choice.
Runes Protocol Set To Transcend Memecoin Status?
In terms of use, DeFi expert Deusex predicted that Rune tokens would start off being traded like meme coins, much like BRC20 tokens, due to their novelty. However, this initial excitement might wane if no Rune token can maintain its price rise and investors suffer losses.
Despite this, the researcher stays hopeful about the future of the Runes Protocol, believing that potential advantages will emerge when the excitement surrounding its debut subsides.
In simpler terms, Ignas from DeFi observes that exciting stories about potential investments tend to surface in groups, with the initial surge fueled by enthusiasm, frequently rooted in new technology or popular culture.
In simpler terms, the researcher is pointing out that meme tokens, like Friend tech, ERC404, and Telegram bots, tend to have brief periods of popularity. However, ideas based on technological innovations are more likely to endure after the hype subsides.
Introduced by Casey Rodamor in December 2022, the Ordinals protocol initiated a series of events with the first surge happening later in 2023. The ongoing fourth wave is spearheaded by the Runes Protocol, a belief shared by DeFi Ignas that it will persist and potentially give rise to more waves in the future.
In the end, although there are reasons for caution in the short term, the expert is convinced that the Runes Protocol has a great deal of promise for the long term. As the protocol goes live, investors should look beyond any initial excitement and carefully evaluate its effects on the Bitcoin Decentralized Finance (DeFi) sector. The protocol aspires to introduce groundbreaking technical innovations and unify various aspects of the industry.
Bitcoin is trading at $62,200, down a slight 0.6% in the past 24 hours.
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2024-04-18 00:42