The Runes protocol deployed by Casey, the founder of Ordinals, is expected to go live on the 20th of this week. How can we be prepared to experience and interact with the protocol as soon as it goes live? This article is sourced from the tweet of crypto KOL Lilyanna in the Bitris Bitli app and is compiled and written by BlockBeats.
(Brief background:
Founder of Ordinals, Casey, made a bold statement: If the market value of the Runes protocol does not exceed 1 billion pounds in the first month of its mainnet launch, he will commit suicide.)
(Wider context:
The next wealth explosion? Bitcoin Runestone: Will send three types of meme coins to holders, airdrop launched this month.)
Table of Contents
Wallet Section
Why do you need to prepare a wallet?
Which wallets should you prepare?
UTXO Section
Why do you need to prepare UTXOs?
How to prepare UTXOs?
UTXO Splitting / Wallet Splitting Tutorial
Conclusion
The Runes protocol is a protocol for issuing homogeneous tokens on the Bitcoin network, deployed by Casey, the founder of Ordinals. It allows Bitcoin transactions to erode, mint, and transfer Bitcoin-native digital goods. It is expected to go live around the fourth Bitcoin halving (around April 20th).
Bitcoin enthusiasts have been eagerly waiting for this moment. As the launch of the protocol approaches, how can we experience and interact with it as soon as it goes live?
Key points:
1. Prepare Unisat Wallet, OKX Wallet, and Xverse Wallet, deposit some funds, and be ready to switch between them.
2. Split UTXOs appropriately. Don’t have only one UTXO per wallet, split at least three larger UTXOs. However, don’t split them into too small amounts, as it would result in high network fees when making payments later.
Wallet Section
Why do you need to prepare a wallet?
1. Different platforms may support different types of wallets. By preparing several commonly used wallets, you can freely switch between platforms.
2. If the popularity of Runes is too high and a wallet’s service goes down, having alternative wallets available can still allow you to continue using them (the probability of service downtime is actually low, so don’t worry).
Which wallets should you prepare?
1. Prepare Unisat Wallet and OKX Wallet, and you can prepare several addresses for each.
These two wallets can be imported into each other. In extreme cases, you can import the private key into another wallet. However, it is recommended to use only one address in one wallet under normal circumstances to avoid confusion.
2. Xverse Wallet:
Download address:
https://xverse.app/download
Please note that Xverse Wallet has two addresses: BTC addresses starting with 3 and asset storage addresses starting with bc1 (for Ordinals, Runes, Rare Satoshi, etc.).
This mechanism is designed to protect your assets. When making payments or initiating purchase transactions, your BTC address will be used for payment, and the assets you receive will be sent to the asset storage address starting with bc1. Only when you place an order or transfer specific inscriptions will it select the corresponding UTXO from your asset address for order placement and transfer, thereby separating money and assets to avoid accidental burning.
Transfer the prepared BTC to the BTC addresses starting with 3, not to the asset storage addresses starting with bc1! Xverse will not touch the BTC in your asset storage address!
UTXO Section
Why do you need to prepare UTXOs?
1. The number of large UTXOs you have may affect the number of transactions you can perform concurrently.
Some platforms or wallets disable unconfirmed UTXOs, which means if your UTXO is stuck in a previous transaction and has not been returned as change, you can only use other UTXOs for payment. If you have too few UTXOs, even if the amount is large, the number of transactions you can initiate concurrently will be very limited. (This is why sometimes on Magic Eden, even though the balance is sufficient, it doesn’t allow purchases)
2. Having too few UTXOs increases the probability of cpfp (Child Pays for Parent), resulting in lower subsequent transaction fees.
If the platform or wallet allows you to use unconfirmed UTXOs and you actually use a previous unconfirmed UTXO as an input when initiating a second payment, congratulations, you have successfully created a cpfp, and the second transaction will share the gas fee with the previous transaction.
For example, if you set a fee of 100 for the first transaction and the on-chain fee rises to 200, and then you initiate a second transaction with a fee of 220 to try again, the second transaction and the first transaction form a cpfp, resulting in an overall effective fee of around 160 (the example is simplified; in practice, it may have different weights depending on the transaction size). As a result, the second transaction still cannot be confirmed.
3. If your UTXOs are too fragmented, when the wallet combines UTXOs for payment, it will increase your network fee costs.
In a single transaction, the more inputs you use for payment, the larger your overall transaction size will be, and the higher network fees you will need to pay. So having UTXOs that are too fragmented may increase your network fee costs. When the fee is 20, you may not have a clear concept of it, but when the fee rises to 200, you will start to feel the pain.
How to prepare UTXOs?
1. Distribute them appropriately across different addresses. If you encounter the situations mentioned above, where a previous transaction is stuck, you can switch to another wallet to initiate new transactions, effectively preventing cpfp. Once the previous transaction is confirmed, you can switch back to using that wallet.
2. Within each address, pay attention to the number of large UTXOs, having at least three or more.
There is no specific recommendation for the amount of each UTXO, but it is best not to have it below 500U.
When the on-chain fee reaches 200 Sats/vB, you would need at least 500U to trade for 20 Runes. Having UTXOs smaller than this value may trigger the third situation mentioned above and result in high transaction costs.
3. If you are preparing UTXOs for a new wallet, you can also transfer a few UTXOs of 600 sats (at least 2) to avoid preparing the wallet with high gas fees when scanning orders.
When scanning orders in the market, the market often asks you to prepare a wallet, which actually means splitting 600 satoshi dummy UTXOs for you (you need n+1, for example, if you are scanning 5 orders at once, you need 6 dummy UTXOs; if you are only buying 1, you need 2 dummy UTXOs. After the transaction is completed, all dummy UTXOs will return to your wallet). The principle of dummy UTXOs is more complicated and will be discussed in a separate post.
4. If it is your frequently used wallet, it is likely that the number of UTXOs and dummy UTXOs has already been adjusted during previous change and transactions, so you don’t need to follow the above process. At most, you can check the denominations of UTXOs and consider merging them when the gas fee is low. If you don’t understand, it’s okay not to complicate things.
The article then provides a tutorial on how to split UTXOs and wallets using the Wizz Cash tool.
In conclusion:
1. If you don’t understand, just prepare Unisat, OKX, and Xverse wallets with some funds.
2. The UTXO tutorial is provided to help you prepare in advance and save some network fees. Even if you don’t prepare, if you use it normally, UTXOs will split on their own over time. It may result in higher network fees, but there’s no need to worry.
3. It is recommended to operate when the fee is below 30, instead of preparing wallets when the fee is at its peak of 200. This tutorial is meant to help you save money, not donate to miners.
The article concludes by mentioning related reports on the rising floor price of the Bitcoin Runestone, the Runes protocol surpassing Bored Ape Yacht Club (BAYC) to become the second-largest NFT, and an analysis of the Runes protocol and its potential.