The first token increased more than 10 times. What is Alkanes, a new asset protocol in the Bitcoin ecosystem?

"Methane" is the hottest word in the Bitcoin ecosystem recently. As the first fair-cast token of the new Bitcoin ecosystem protocol Alkanes, the market value of "Methane" METHANE has exceeded 6 million US dollars, that is, each METHANE is more than 60 US dollars. The editor asked some Bitcoin ecosystem players who participated in the casting. The cost difference of casting is relatively large. If the casting cost of 5 US dollars per piece is taken as the benchmark, then the profit of casting METHANE has exceeded 10 times.

In the case that the Bitcoin ecosystem has been deserted for a long time, how did the new asset protocol Alkanes come out?

Protocol background

The predecessor of the Alkanes protocol was called Protorunes, that is, "programmable runes", and the founder was the same. This thing also briefly attracted the attention of the Bitcoin ecosystem in the middle of last year, when runes were still popular.

The founder of the protocol @judoflexchop is the chief technology officer of the Bitcoin wallet Oyl Wallet. The number of users of this wallet in the Bitcoin ecosystem may not be large, but its popularity is still high. You can see why by looking at its financing situation:

On March 8, 2024, Bitcoin infrastructure company Oyl completed a $3 million Pre-Seed round of financing, led by Arca, with participation from Foresight Ventures, Arthur Hayes' family office Maelstrom, Domo, UTXO Management, Taproot Wizards CEO Udi Werthheimer, Kanosei and FlamingoDAO.

Because of Arthur Hayes' participation, this wallet quickly became well-known in the Bitcoin ecosystem. In the middle of last year, Oyl launched a Bitcoin NFT project called "Airheads", which caused controversy because of its relatively high minting price. In terms of NFT price performance, this is a "failed" project, but recently it has risen by nearly 3 times due to the popularity of the Alkanes protocol.

Although they are all wallets, in the Bitcoin ecosystem, several major wallets are basically not just wallets. For example, OKX, UniSat, Magic Eden, and the protagonist of this article, Oyl, have many other Bitcoin ecosystem businesses outside of wallets. Only Xverse's business scope is relatively "focused". Back to Oyl, in addition to wallets, they also made a Bitcoin RPC called "Sandshrew" and the Alkanes protocol.

Reasons for the explosion

Alkanes is a new Bitcoin asset protocol. In general, it borrows the "Runestone" structure of the Rune Protocol, but it is more scalable and supports smart contracts. As mentioned earlier, the predecessor of this protocol is Protorunes. From the name, Protorunes looks like a "magic version of Rune", but it is not. Simply put, the Rune Protocol and the "Runestone" structure are like closed iOS, while Protorunes and Alkanes are like open source Android.

Protorunes is equivalent to the "Runestone" of the Rune Protocol. The "Runestone" here is not the NFT with a strong wealth-creating effect in the early days of Rune, but the "transaction data package" of Rune. Simply put, it is a piece of information embedded in a Bitcoin transaction, which is the basis for the index to determine whether there is a Rune operation in a transaction.

If the indexer finds the "RUNES" mark when scanning the OP_RETURN of each transaction, it will parse the data after the mark, such as etching, casting, transfer, etc. "Runestone" is like an operation guide, and the indexer obtains the index result based on the guide.

"Runestone" is an operation guide limited to the Rune Protocol. It corresponds to the Rune Protocol in a single line, while Protorunes is different. To put it most directly, we cannot directly let the Rune Protocol indexer implement such an action, "I am a sub-asset protocol based on Runestone, please index me together", but Protorunes can. Everyone can customize a new asset protocol according to the data format of Protorunes. These protocols will be assigned a "Protocol ID". The indexer will read the "Protocol ID" to determine which protocol specification to parse.

There are some modular chains like Ethereum that make things simpler. For developers, just use the tools provided by Oyl, and there is no need to make a set of indexers by yourself.

As for the level of smart contract implementation, before the resurrection of OP_CAT, it can basically only be the idea of ​​storing contract data in transactions and executing off-chain indexes, which cannot deviate too much.

In addition to the technical level, there are two main reasons why this protocol can gain momentum. First, it has received strong support from the Chinese inscription player group. There is no doubt that the Chinese inscription player group has the most consumption power in the Bitcoin ecosystem. This group is quite special. The PvP angle of Solana meme coins is redundant in the Bitcoin ecosystem, but it is also quite difficult to win the recognition of the Chinese inscription player group. Once the inscription gains momentum, the speed of spread in the WeChat group will be quite fast and inspiring.

Searching the keyword "Alkanes" on Twitter, you will find that most of the preaching content comes from Chinese people, and the founder of the protocol also sent a Chinese tweet to thank the Chinese community for its support. iDclub, an early forging tool in the Bitcoin ecosystem, created a trading market for the Alkanes protocol, which was also created by Chinese people.

The second reason is that the project owner of this protocol has a background, and according to the plan they revealed, it is not just to issue an asset protocol to "drain" their wallets. They also plan to do AMM, BTC staking, stablecoins, MEV tools and trustless ZK bridges, which is equivalent to building a BTCFi ecosystem around this protocol.

The logic of the entire narrative makes sense. An asset protocol that supports smart contracts, and applications around this asset protocol. If this narrative is not told by a project owner with a background, it will be difficult to convince people. After all, in the Bitcoin ecosystem, players still have some pain about the decline of Atomicals, and there are too many uncertainties if big things are not handled by mature teams.

Protocol leader

- METHANE, the first fair minted token of the Alkanes protocol, has a current market value of approximately $6 million. The Chinese meaning of Alkanes itself is "alkane", and the Chinese meaning of METHANE is "methane", so BUTANE "butane" and HEXANE "hexane" are also mentioned by players, but these two tokens currently have a market value of only about $250,000.

- DIESEL, from the official, is also the first token deployed by the Alkanes protocol, with a current market value of approximately $12.6 million. The mechanism of this coin is quite special, with a total of only 1.5625 million, 28% of which are reserved by the team, and 72% are produced block by block with each Bitcoin block, and the output is halved according to the Bitcoin halving time. In each block, the DIESEL minting transaction with the highest mining fee will eventually obtain the DIESEL output of that block. In a word, DIESEL is issued once per block, and only one person (the one who gets the highest mining fee for the minting transaction) can mine DIESEL per block. Ordinary players are basically unable to mint, and scientists will automatically monitor the mining fee and keep adding it.

Because METHANE is minted fairly, the holder group/chip distribution is definitely healthier than DIESEL, and it is fully circulated, so currently on social platforms, METHANE's voice is much higher than DIESEL. If you don't look at the market value and just look at the voice, you will feel that METHANE is the leader. What empowerment will DIESEL have in the future, the official has not revealed more information. So METHANE is far superior at the community level, and DIESEL is superior in official background and potential empowerment expectations in the future.

Conclusion

This protocol is still in a very early stage, and the support of various wallets for the protocol assets has not kept up, so it is best to use Oyl Wallet to interact with the protocol's assets to ensure asset security.

The success of this protocol basically brings together the success factors of the new asset protocol in the Bitcoin ecosystem - "mainnet assets", "fair casting" and "Chinese support", plus the "smart contracts" and the narrative of the ecosystem layer, it has managed to break through the siege when the Bitcoin ecosystem has been deserted for a long time. I hope that the ecosystem can be built up in the future and go further and further.