Less than 10 hours away from the Bitcoin halving, the Runes Protocol that the community has been eagerly anticipating is about to go live on the Bitcoin network. In light of this, Leonidas, the developer of Ordinals, shared 5 tips today for minting Runes to help investors or those new to the Bitcoin ecosystem avoid pitfalls.
Table of Contents
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Minting coins like an auction, highest bidder wins
Choosing the right time to mint
Pay attention to the minting mechanism
Pay attention to the pre-minting ratio
Estimating potential market value
Bitcoin block times are longer, which means a lot can happen between two blocks. If a Rune is about to be minted, you need to ensure that the transaction fee you pay is much higher than others’ to ensure that your transaction is prioritized for processing. Without processing, you won’t receive the Runes and will also lose the transaction fee. Remember that you are competing with others to do the same thing, so in the last hour of a highly popular minting event, network fees will skyrocket. Think of the memory pool as an auction, where the highest bidder gets transaction confirmation.
If you believe that a certain Rune will not be minted quickly, be smart and try minting when fees are lower, as minting is not urgent. For example, Bitcoin network fees are usually lower on weekends and during late-night hours in North America. You can take advantage of this time to place minting orders in the memory pool at a lower cost, and these orders can wait there for a few days before getting confirmed.
Pay close attention to the minting mechanism before minting. For example, Casey plans to issue a hard-coded Rune called “UNCOMMON•GOODS” that will be open for minting for the next four years. This means it would be foolish and unwise to mint it on the day with the highest transaction fees in Bitcoin’s history. Instead, you should wait for a bear market or a time when fees are very low and few people are using Bitcoin to mint it. Otherwise, your Rune’s cost may be 10 times higher than others.
Creators of Runes can pre-mint the Runes they issue, essentially treating the pre-minted quantity as the amount that will be sold on the market after minting. A pre-minting ratio exceeding 10% is considered “greedy” if there has been only one Bitcoin transaction. In contrast, a pre-minting ratio of 5% is more reasonable. However, it is even better to look for or choose projects that do not have any pre-minting behavior.
Think of minting Runes as buying them, because that’s exactly what you’re doing, except you’re paying to secure the Bitcoin network for the creators. In your mind, you should think in terms of market value. If a Rune requires 100,000 mintings to complete and each minting costs $100, ask yourself if you are willing to buy this Rune with a market value of $10 million on a decentralized exchange. This understanding is crucial and can help you make wise decisions. For example, among the first 100 issued Runes, many will have open minting. At this time, you should look for the one with the “fewest minting times,” which means you can acquire the first 100 issued Runes with the lowest possible market value.
