By Michael Scott
The American investment management firm, Franklin Templeton is optimistic that Runes unveiling has the potential to broaden the Bitcoin ecosystem. The New York-based firm believes that Runes will thrust the Bitcoin decentralized finance (DeFi) to close the gap on rival products running on the Ethereum and Solana chains.
Runes Potential to Power Bitcoin DeFi and Fungible Token
Franklin Templeton’s digital assets division revealed on Monday, April 15, that unveiling Runes will propel Bitcoin DeFi to bridge the gap with rival chains Ethereum and Solana within the fungible digital asset segment.
The investment firm behind spot Bitcoin ETF EZBC considers the fungible token segment for Bitcoin to be relatively small compared to Solana and Ethereum. Nonetheless, Franklin thinks the unveiling of the efficient token standard (Runes) positions Bitcoin to bridge the gap for the fungible market cap with that of rival blockchains.
Runestone developer Leonidas hailed the bullish call on Runes by Franklin Templeton to help Bitcoin DeFi realize potential. Leonidas responded to the prediction by the firm that manages $1.4 trillion worth of assets, indicating that the majority of the audience will mid-curve the forecast.
ORDI Plunges Ahead of Runes Protocol Launch
The Franklin Templeton report pointed out the input of the BRC-20 standard towards facilitating the proliferation of fungible tokens in the Bitcoin ecosystem. However, the firm faulted the BRC-20 standard for causing unspent transaction output (UTXO) junk during the burning and minting process.
Franklin Templeton links the UTXO with bloating the network and elevating the fees owing to the Bitcoin fragments following transactions. The unspent funds are utilized in subsequent transactions.
With a few days till Bitcoin halving, the BRC-20 tokens have suffered a blood bath in recent weeks, leaving ORDI with 39.6% in the past seven days, as per CoinGecko data. Blockchain intelligence firm LunarCrush attributes the downtrend witnessed for the BRC-20 tokens to Runes.
LunarCrush chief executive Joe Vezzani explained that a bullish call on Runes yields less positive sentiment for the BRC-20 tokens. CoinGecko data shows the ORDI plunge leaves the token exchanging hands at $42.33, 55.73% below the all-time high price of $95.52 realized early last month.
Franklin Templeton considers that unveiling the Runes protocol will yield multiple improvements. The investment firm thinks the launch will eliminate junk UTXOs, break the reliance on off-chain data, and increase privacy and the quest for additional tokens. Also, the Runes protocol developers promise compatibility with the Bitcoin Lightning Network.
Franklin Templeton has recently admitted to a renaissance in Bitcoin activity. The firm lauded the Ordinals for fueling the renaissance in the Bitcoin activity, noting that Bitcoin Puppets, Bitmap, NodeMonkes, Ordinal Maxi Biz and Runestone realized a market value exceeding $1.11 billion.
Will Runes Protocol Replicate Ordinals Input in Bitcoin Ecosystem?
The firm revealed in early April that Bitcoin innovation and development has witnessed a rebound in activity. Franklin Templeton linked the positive momentum to innovations driven via the Bitcoin NFTs identified as Ordinals supported by BRC-20 tokens and Bitcoin Layer 2s.
The bullish call on Runes came amid Franklin Templeton’s claiming on Monday that the crypto space will see users exceed 1.2 billion by 2025. The firm held that realizing the exponential growth that the crypto industry forecasts DeFi on Bitcoin, having a widely adopted fungible token standard is mandatory.
Franklin Templeton considers fungible tokens on Bitcoin to be barely $0.6 billion against the over $1.26 trillion market cap. Such contrasts with Ethereum, whose fungible token is $499 billion, against its market cap of $378 billion. Meanwhile, Bitcoin’s fungible token value trails Solana’s $37 billion.
Franklin Templeton expressed excitement that the Runes protocol unveiling will replicate the Ordinal’s impact on the non-fungible token by catapulting the DeFi market and fungible tokens from the present slumber. The firm hails the Ordinals theory’s remarkable rise since its unveiling by Bitcoin developer Casey Rodamor in December 2022 to realize $2 billion in market value this month.
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