The Runes Protocol Unveils 'Agents' Upgrade Enabling Automated Market Makers (AMMs) Directly on Bitcoin's Layer 1

The Runes Protocol, a Bitcoin-based fungible token standard, has unveiled a major upgrade introducing “agents” to enable Automated Market Makers (AMMs) directly on Bitcoin’s (BTC) Layer 1.

The Runes Protocol, a Bitcoin-based fungible token standard, has announced a major upgrade that introduces “agents” to enable Automated Market Makers (AMMs) directly on Bitcoin’s (BTC) Layer 1.

This development aims to enhance decentralized trading capabilities while maintaining Bitcoin’s security and trustless nature.

Casey Rodarmor, the creator of Runes, announced the upgrade on Monday. The agents utilize an “interactive transaction construction” mechanism to allow market makers to add liquidity to Runes AMMs in a trustless manner.

The feature is designed to tackle inefficiencies in Bitcoin-based token trading, such as “batch splitting” and “mempool front-running,” which have previously hindered seamless on-chain trading.

Enhancing Bitcoin’s DeFi Landscape

The Runes Protocol was originally developed to introduce fungible tokens on Bitcoin using its Unspent Transaction Output (UTXO) model.

Unlike BRC-20, which relies on Ordinals inscriptions and can lead to inefficient transaction batching, Runes aims to improve token efficiency while integrating natively with Bitcoin’s existing architecture.

The latest “agents” upgrade further expands Runes’ capabilities by enabling AMMs, a critical component in DeFi. AMMs facilitate token swaps without relying on traditional order books by using liquidity pools where traders can exchange assets in an automated manner instead.

According to Rodarmor:

“With this upgrade, Runes AMMs will allow market makers to add liquidity seamlessly and trustlessly, solving key issues in decentralized trading on Bitcoin.”

Before this development, Bitcoin-native AMMs were mostly limited to L2 solutions like Stacks, where projects such as Bitflow and Pontis launched AMMs to address Bitcoin’s transaction speed and cost limitations.

The introduction of agents on the main Bitcoin network aims to bring similar functionality to the base chain while leveraging its industry-defining security and decentralization.

Market makers providing liquidity to Runes AMMs will benefit from reduced risks associated with centralized market-making solutions, as the interactive transaction construction method ensures trustless and transparent liquidity provisioning.

Additionally, the introduction of agents helps mitigate issues like front-running, where malicious actors exploit mempool visibility to manipulate trade execution. By improving transaction integrity, Runes AMMs could make decentralized trading more efficient and secure.

While the launch date for Runes AMM agents has yet to be confirmed, the upgrade represents a significant milestone in expanding Bitcoin’s on-chain financial infrastructure.input: Bitcoin's price has been largely flat over the past 24 hours, remaining in a tight range after recent gains.

According to data from CoinDeFi, Bitcoin is currently trading at around $66,160, down slightly from a high of $66,360 reached earlier on Monday.

The cryptocurrency had seen a surge in price over the past week, recovering from a low of $58,000 to reach highs of over $66,000.

However, despite the recent gains, Bitcoin's price is still down around 60% from its all-time high of nearly $72,000, which was reached in November 2021.

The cryptocurrency has been volatile throughout the year, largely driven by macroeconomic factors such as inflation, interest rates, and geopolitical events.

Earlier this month, the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against cryptocurrency exchange Binance, alleging that the platform engaged in various illegal activities, including operating as an unregistered exchange and defrauding clients.

The lawsuit, which was filed in a federal court in Washington, D.C., also names Binance CEO Changpeng Zhao as a defendant.

The SEC is seeking to have Binance cease operating in the U.S. and return any illegally obtained funds to investors.

In a separate development, the SEC also sued Coinbase, the largest U.S. cryptocurrency exchange, for allegedly selling unregistered securities to U.S. investors.

The SEC's complaint, which was filed in a federal court in New York, alleges that Coinbase sold seven cryptocurrencies—namely, Lumen (XLM), Cardano (ADA), Optimism (OP), Polkadot (DOT), Flow (FLOW), Monero (XMR), and Solana (SOL)—without registering them as securities.

The agency claims that these cryptocurrencies should have been registered with the SEC, given the manner in which they were offered and sold.output: Cryptocurrency prices are broadly flat on Monday morning, with Bitcoin (BTC) and ether (ETH) hovering around recent levels.

Bitcoin dropped 0.1% over the past 24 hours to $65,967. The world’s largest cryptocurrency had risen as high as $66,360 and was trading in a tight band.

The cryptocurrency had seen a surge in price over the past week as it recovered from lows of $58,000 to hit highs of over $66,000