Odin.fun Controversy: A New Opportunity or the Same Old Tricks in the Bitcoin Ecosystem?

Recently, the Odin.fun project has attracted considerable attention in the cryptocurrency circle. As a token launch and trading platform based on the Runes protocol, it has brought a bit of vitality to the long-silent Bitcoin ecosystem. However, the sudden fund anomaly incident on March 7 raised concerns about the security of such platforms.

The co-founder of Odin.fun quickly responded on social media, stating that an error in the hard deposit synchronization code caused some users' balances to display amounts exceeding their actual deposits. He emphasized that users' funds are currently safe, and the reason for the inability to find the 74 BTC deposit transaction on the chain is precisely this technical failure.

In the cryptocurrency industry, the relationship between token launch platforms and public chains has always been a topic of great concern. A successful token launch platform often brings substantial traffic and funds to the public chain it relies on. However, unlike other token launch platforms on public chains, Bitcoin ecosystem projects like Odin.fun do not directly build on the Bitcoin main chain, but instead choose to use layer two networks as a carrier to enhance user experience and reduce transaction costs.

Although this design has improved usability, it also brings a significant problem: it is difficult to fully share the security of the Bitcoin main chain. The recent funding anomaly incident at Odin.fun is a concrete manifestation of this potential risk.

What is more worth discussing is whether token launch platforms built on layer two networks, like Odin.fun, can really bring enough momentum for the revival of the Bitcoin ecosystem. Can they attract enough funding and user attention?

Odin.fun was launched in February 2025, founded by the creator of the Bitcoin ordinal market Bioniq. According to official data, the platform achieved a trading volume of over 1000BTC in just one month, with the number of user addresses exceeding 37,000, and the market value of the most popular rune token once surpassed 35 million dollars.

The Runes protocol, as a new generation of Bitcoin asset issuance standard after Ordinals and BRC-20, aims to solve the issues of transfer efficiency and UTXO expansion faced by the former. It is these innovations that bring new uses to Bitcoin beyond value storage, driving the flourishing development of the Bitcoin ecological infrastructure in 2023 and 2024.

The core advantage of Odin.fun lies in its user experience design. The platform achieves second-level issuance and one-click trading of Runes assets, and also provides convenient features such as account abstraction and gas-free transactions. The realization of these features is attributed to its adopted Layer 2 solution, Valhalla, which can complete transaction confirmation within 2 seconds.

However, behind the convenience lies risk. Users need to deposit Bitcoin into the platform account, which is essentially transferring assets across chains to the project's layer 2 network. Although the official claims to have adopted a decentralized multi-signature mechanism to protect user funds, this model essentially still resembles the operational methods of centralized exchanges.

The token issuance mechanism of Odin.fun is called "Ascend", which adopts a bonding curve model. In the initial phase of the token, pricing is based on a specific curve, with 80% of the supply sold at a price of 0.211 BTC. After completing Ascend, the remaining 20% of the token supply and 0.2 BTC will be injected into the AMM pool, after which trading will follow the regular AMM curve.

The platform has also introduced mechanisms such as liquidity provision and referral rebates in an attempt to attract more users. However, compared to the previously market-exploding inscription projects, Odin.fun does not seem to have generated the same scale of enthusiasm. Its highest market cap of only $35 million for the leading token is hard to compare with those innovations that have truly changed the market landscape.

Although Odin.fun combines elements of Runes and Meme pump to some extent, these concepts are no longer fresh topics in the market. For the Bitcoin ecosystem, it is difficult for a project with such a relatively weak narrative to take on the heavy responsibility of driving the revival of the entire ecosystem.

Investors should exercise caution and manage risks reasonably when participating in such projects. When selecting potential projects, attention should be paid to community activity and funding support. However, it is important to recognize that this is essentially closer to a speculative behavior and is not much different from traditional Meme coin speculation.