Runes Dex is an Automated Market Maker (AMM), and the exchange is the central component of Runes Dex.
The protocol is operational on Bitcoin Runes, providing safe and decentralised trading opportunities on the Bitcoin mainnet.
Runes Dex enables users to trade directly from their own wallets, circumventing the necessity for a CEX. This ensures the retention of complete control over one's assets, obviating the need to entrust them to a third party.
Token exchanges on Runes Dex are only possible when there is sufficient liquidity for those tokens. Without adequate liquidity, trading can be difficult, expensive or impossible.
Here we explain what UTXOs are and how to manage it. What are UTXOs
A UTXO is the amount of digital currency remaining after a blockchain transaction is executed.
Transaction Creation: When a transaction is made, it consumes one or more UTXOs as inputs and creates new UTXO**s as outputs
When you send Bitcoin, several steps programmatically take place. One of the earliest steps in the transaction process is for your cryptocurrency wallet to scan the blockchain for the amount of funds you have. These funds are known as unspent transaction outputs (UTXOs).
The funds are considered “unspent” because they are freely available for you to send to someone or move to another wallet.
They are called “transaction outputs” because they were created from previous transactions.
UTXOs are processed continuously and are responsible for beginning and ending each transaction.
When a transaction is completed, any unspent outputs are deposited back into a database as inputs, which can be used at a later date for a new transaction.
Example:
You can think of UTXOs as loose change leftover from previous Bitcoin transactions.
If you spend $12 on lunch using a $20 bill, you’d have $8 leftover. In this example, the leftover $8 would be an unspent transaction output. It would be generated as an entirely new “$8 bill” UTXO and go back to your wallet, ready to be used to buy something else.
Just as you can’t physically give a shopkeeper a $5 bill and then give the same $5 bill to someone else, a Bitcoin user cannot successfully use the same unspent transaction output in two separate blockchain transactions.
In this way Bitcoin solves the double-spending problem. The other widely used concept of wallet balance tracking is called Account/Balance model. It’s being used by EVM chains like Ethereum, EOS, Tezos etc.
Managing UTXOs For some transactions, such as bulk minting Runes or sending multiple transaction in one block, you would need to have your BTC divided in lesser or bigger UTXO pieces. To adjust them to the size needed, you would either have to split or consolidate your UTXOs.
Split:
To split UTXOs you would need to use third-party services. As for now, the best options are:
How many sats per UTXO are optimal for bulk Runes mints? Here you will need to estimate how much a mint will cost. At times of low mempool occupancy, the gas fee rate ranges at about 25-35 sats/vB. Therefore, for optimal speed and in order to not get front ran, you’d like to set the gas fee slightly (~5 sats) above the current average rate. An absolute minimum per UTXO would be 50,000 sats = 0.0005 BTC ($35 if BTC=$70k). This would be enough to cover up to 10 mints per UTXO in separate blocks (at low fee rates). In the best scenario, you’d have a mint strategy that involves different sized UTXOs. If your BTC is split in larger UTXOs, you’ll be able to mint during the high network fees.
BTC=$70k
1,000,000 sats = 0.01 BTC ($700)
500,000 sats = 0.005 BTC ($350)
400,000 sats = 0.004 BTC ($280)
300,000 sats = 0.003 BTC ($210)
200,000 sats = 0.002 BTC ($140)
100,000 sats = 0.001 BTC ($70)
50,000 sats = 0.0005 BTC ($35)
Consolidation:
You can consolidate UTXOs by sending them to the wallet, where you'd like to get 1 consolidated UTXO. You can as well consolidate within the wallet. To do so, just enter the address you're sending from as a receiver address.
A Bitcoin Taproot address is a relatively new kind of Bitcoin address. Also known as Pay-to-Taproot (P2TR) addresses, it leverages the Taproot protocol to provide a more efficient mechanism for transacting with Bitcoin.
Taproot is the latest Bitcoin address format designed to enhance privacy, scalability, and scripting capabilities. Addresses in this format start with "bc1p."
Taproot allows the aggregation of multiple signatures, making complex transactions more efficient and cost-effective.
Taproot has enabled new smart contract functionalities on Bitcoin, paving the way for the emergence of Ordinals and Bitcoin-native tokens like BRC-20 and Runes.
Example Taproot Address: bc1pavlmkapyn630588yvykxuhhwgzke7d7h0lcgca8a9uczcrct8elq7aqmt8
In this video you’ll learn how to set up an Xverse Wallet App, the leading Bitcoin wallet for Ordinals, BRC20 and Runes.
Xverse Wallet have different types of addresses to manage various assets securely. Here’s a quick overview:
Segwit Address (3): Store your Bitcoin (also used for purchasing Ordinals, Runes, etc)
Taproot Address (bc1p): Store ordinal inscriptions, BRC-20 tokens, and Runes.
In Xverse, both addresses support Runes, but it would be preferable to use Taptroot Adresses.
For other wallets we recommend to use only Taproot address ( bc1p )
Taproot Wallets Top Picks:
At this point, RunesDEX has integrated Xverse, Unisat, OKX wallets and will be adding further options in the nearest future.
Bitcoin Runes - Bitcoin Runes is kind of a new token standard in the Bitcoin ecosystem. In simple terms, Bitcoin Runes are a new token standard for creating fungible tokens on Bitcoin.
The protocol was introduced last September by Bitcoin developer Casey Rodarmor, the creator of the Bitcoin Ordinals. Runes improves fungible tokens on Bitcoin. One of their benefits is that they increase Bitcoin’s appeal and could onboard millions to the network. Runes make it easier to create memecoins and other community-based projects on Bitcoin. There are already lots of memecoin projects on the Runes train.
In addition, the Bitcoin Rune inherits some of the native features of the Bitcoin chain, including its security. However, it is important to proceed with caution as Runes are still in their early stages.
Runes is different from other Bitcoin tokens standarts because it doesn't use a native token or off-chain data. It's a UTXO-based model that uses unspent transaction outputs (UTXOs) to track the Runes balance. Each transfer transaction is split into different UTXOs, each holding a different amount of Runes.
The Runes protocol’s launch on the Bitcoin mainnet on April 20, 2024.
Runes come into existence by being etched. Etching creates a rune and sets its properties. Once set, these properties are immutable, even to its etcher.
Rune protocol messages, called runestones, are stored in Bitcoin transaction outputs.
A runestone output's script pubkey begins with an OP_RETURN, followed by OP_13, followed by zero or more data pushes. These data pushes are concatenated and decoded into a sequence of 128-bit integers, and finally parsed into a runestone.
A transaction may have at most one runestone.
A runestone may etch a new rune, mint an existing rune, and transfer runes from a transaction's inputs to its outputs.
A transaction output may hold balances of any number of runes.
Runes are identified by IDs, which consist of the block in which a rune was etched and the index of the etching transaction within that block, represented in text as BLOCK:TX. For example, the ID of the rune etched in the 20th transaction of the 500th block is 500:20.
Most major exchanges provide a wide range of payment options, enabling users to purchase BTC using debit or credit card, Apple Pay, Google Pay, Samsung Pay, or wire transfer.
That's it! You're now ready to take on Bitcoin web3. Remember, use a non-custodial wallet, meaning you have 100% control of your funds at all times. It's essential to stay vigilant and backup your secret recovery phrase.
