Definition
Runes is a Bitcoin-based fungible token protocol that uses an output-oriented accounting model. Its messages, called runestones, are encoded in designated OP_RETURN outputs and interpreted to define operations such as creating a rune, minting units under specified terms, and allocating balances to transaction outputs. Rune creation is commonly called etching. Unlike the original BRC-20 approach, Runes does not represent its basic operations as JSON inscriptions. Bitcoin full nodes validate the underlying transactions, while protocol-aware software interprets rune balances and transfer rules. The reference implementation is important because precise parsing behavior can affect outcomes, including the treatment of malformed messages. Rune units are separate from the satoshis in the outputs that carry associated balances and still require bitcoin for transaction fees. A valid token record does not establish demand, redeemability, or issuer credibility, and careless transaction construction can unintentionally move or destroy token balances.
Source references
References accompanying this glossary entry:
Educational reference, not financial advice. See our financial disclaimer and editorial policy.