Runes Liquid Fund launches with $3 million investment as halving nears

Sora Ventures, a venture capital firm focused on the Bitcoin ecosystem, has announced the successful raise of $3 million to launch a Runes Liquid Fund, a new investment vehicle dedicated to investing in liquid assets on the Runes Protocol. Investors include Bankless Ventures, SpaceshipDAO, entities from BTC Inc., Bitcoin Magazine, and Serafund.

Runes refers to a new fungible token protocol introduced to the Bitcoin blockchain. This protocol is designed to facilitate the creation, issuance, and transfer of Bitcoin-native digital commodities, potentially transforming how digital assets are managed and exchanged on the network.

The Runes protocol is built upon an indexer-based model that extends the social consensus mechanisms first popularized by the Ordinals initiative. It utilizes a UTXO (Unspent Transaction Output)-based system, where tokens, known as Runes, are directly issued into a UTXO during the transaction that sets their initial supply, ticker symbol, and decimal precision. This approach is closely aligned with Bitcoin’s native design principles and aims to provide a more efficient and flexible management of token balances and transfers.

One of the key features of the Runes protocol is the introduction of Runestones, which are akin to “precompiles” for Runes. These instructions are stored within the OP_RETURN of a transaction and are responsible for facilitating the movement of Runes from inputs to outputs. They also ensure future compatibility through an even-odd tagging system.

The Runes protocol is expected to support a wide range of applications and interactions, from intricate inscriptions that could influence the abilities of digital collectibles to facilitating off-chain liquidity pools for Rune trading. This opens up new possibilities for DeFi on the Bitcoin network, which has generated excitement within the community.

The launch of Runes is strategically timed to coincide with the Bitcoin halving around April 20, and the Runes protocol is set to launch at this time. Runes were created by developer Casey Rodarmor, who is also known for creating the Ordinals protocol. The introduction of Runes is seen as a significant evolution in the Bitcoin protocol’s capabilities for handling digital assets directly on its blockchain.