Franklin Templeton Digital Assets, an investment firm, has released a new report suggesting that the introduction of Runes could help Bitcoin narrow the gap with Ethereum and Solana in the fungible digital asset market. Currently, Bitcoin’s market for fungible tokens is considerably smaller compared to ETH and SOL. However, with the launch of the more efficient Runes token standard, Bitcoin has the potential to bridge this gap.
The report by Franklin Templeton acknowledges the role of the BRC-20 standard in the proliferation of fungible tokens on Bitcoin. However, the firm points out that the standard’s burn and minting process results in a significant amount of junk Unspent Transaction Output (UTXO), which contributes to network bloat and increased fees. The unspent funds eventually get utilized in new transactions.
Franklin Templeton Digital Assets highlights several improvements that the Runes protocol brings, including the elimination of junk UTXOs, independence from off-chain data, absence of additional tokens, and enhanced privacy and compatibility with the Bitcoin Lightning Network.
The investment firm has also expressed interest in other emerging digital assets. In a previous statement, Franklin Templeton hailed Ordinals as driving a renaissance in BTC activity, mentioning projects such as NodeMonkes, Runestone, Bitcoin Puppets, Ordinal Maxi Biz, and Bitmap, which collectively possess a market capitalization of $1.11 billion.