Omnity Introduces Cross-Chain Transfer Functionality For Runes

Runes users can now move their assets across Layer 1 and Layer 2 networks.

By: Samuel Haig Loading...

Omnity Introduces Cross-Chain Transfer Functionality For Runes

Just ten days after its mainnet launch, Runes, the new protocol for issuing fungible tokens on Bitcoin, is poised to spread onto new networks following an integration by Omnity.

Announced on April 29, Omnity, an Internet Computer Protocol (ICP)-based “omnichain interoperability protocol,” integrated Runes. Omnity describes itself as a tech stack enabling connections between “any Layer 1, Layer 2, or appchain” and the Bitcoin network, meaning the integration allows users to move Runes onto new networks.

“Omnity is the first protocol to support Runes interoperability,” Omnity said. “ICP’s on-chain Bitcoin integration is essential because it brings smart contract functionality to Bitcoin without having to trust wrapped BTC from centralized bridging services, opening up new possibilities for DeFi and Dapp development without congesting the Bitcoin network and driving up transaction fees.”

Omnity allows cross-chain Runes transfers by minting a “Twin Token” when users seek to move Runes between networks. The Twin Tokens leverage Internet Computer’s ICRC-2 standards and Chain Fusion Technology — which enables users to read and write to Bitcoin from ICP.

Runes’ explosive growth

Runes celebrated its mainnet launch on April 20 after airdropping Runestones to more than 90,000 wallets that were previously active in the Bitcoin Ordinals ecosystem in March.

Runes were first proposed by Casey Rodarmor, the investor of the Ordinals inscription technique, in September 2023 Ordinals burst onto the scene in early 2023, comprising a method for creating NFT-like assets on the Bitcoin blockchain. Domo, an anonymous developer, quickly followed up with the creation of the BRC-20 token standard, which leverages Ordinals to create fungible tokens.

While BRC-20 tokens quickly exploded in popularity, the standard has garnered criticism for being data-intensive, driving mempool congestion, and pushing up transaction fees on Bitcoin.

Runes sought to address the inefficiencies associated with BRC-20 by streamlining asset data storage and indexing, introducing compatibility with the Lightning Network Bitcoin Layer 2 network, and introducing “homomorphic binding” with Bitcoin unspent transaction outputs (UTXOs).

“Runes is a token standard that operates natively with Bitcoin and eliminates the ‘junk’ UTXOs of previous standards like BRC-20,” Omnit said. “Its design efficiency positions it to serve the Bitcoin network in a role analogous to Ethereum’s ERC-20 tokens.”

However, Runes is now a major source of transaction volume on Bitcoin and contributing to sky-high transaction fees on the network. According to Ycharts, average Bitcoin transaction fees surged to an all-time high of $128.45 on April 20 as Runes launched.

Bitcoin transaction fees. Source: Ycharts.

Omnity said its integration will reduce congestion on Bitcoin by shifting transactions onto ICP.

Inscriptions spread across web3

The integration comes after the implementation of Ordinals-inspired inscription protocols onto new Layer 1 and Layer 2 networks in late 2023 drove transaction throughput to new all-time highs on multiple chains.

Rapidly spreading inscription protocols drove throughput gains of 4,500% on Near, 6,900% on Polygon, and 8,990% on Fantom in a matter of just days. Combined Layer 2 throughput also jumped to 152.1 transactions per second (TPS) on Dec. 16 from 45.5 TPS two days prior, marking record highs on Arbitrum, ZkSync Era, and Mantle each hosting record activity in late December.

However, the party quickly came to an end, with inscriptions activity crashing on most networks by the end of January.