Key Highlights:
- An automated market maker (AMM) for Runes is being launched on Stacks.
- This marks the inaugural AMM for Runes tokens on the Bitcoin layer-2 framework.
- The Runes protocol standardizes the creation of fungible tokens on Bitcoin, evolving from the Ordinals protocol.
- Runes debuted in April, coinciding with Bitcoin's fourth halving, which initially generated significant user engagement.
Crypto enthusiasts now have a new approach to trade Runes in a manner that promises increased speed, reduced costs, and enhanced security.
The AMM was activated on Wednesday, following the announcement of Stacks' sBTC, a Bitcoin-backed asset, the day before.
The Bitflow Finance DEX team and Bitcoin bridge developer Pontis created this AMM to enhance liquidity through algorithmic trading.
The Runes protocol leverages Ordinals technology to allow the creation of fungible tokens, similar to how NFTs can be crafted.
Upon Runes' launch in April, it generated considerable activity, processing over 78.6 BTC (approximately $8.18 million) in transaction fees shortly after the halving event.
However, interest declined significantly within weeks, with fees dropping over 50%.
Bitflow's goal is for the new AMM to enable Runes to expand by resolving issues such as slow transaction speeds, high costs, and sniping in pending transactions.
Bitflow utilizes Stacks' Nakamoto upgrade to facilitate these improvements, enhancing the Bitcoin base layer functionality.
The Nakamoto upgrade, activated in October, aims to significantly quicken transaction times by separating the production of Stacks' blocks from Bitcoin's, while also ensuring secure finality.
"Another key feature that Nakamoto unlocks is Bitcoin finality. After a transaction is confirmed, reversing it is as hard as reversing a Bitcoin transaction," stated Bitflow.
The use of Pontis allows efficient trading between BTC and Runes, ensuring that each transaction is recorded in one Bitcoin and one Stacks block.
