1. Registration
The user creates a passkey (WebAuthn) with a biometric prompt — Face ID, Touch ID, or Windows Hello. The browser’s authenticator returns a PRF (Pseudo-Random Function) output, which is hashed to derive a secp256k1 key pair deterministically. The private key never leaves the device; only the compressed public key is sent to Bitrune. The platform combines the user’s public key with its own via MuSig2 (BIP-327) to derive an aggregate public key. This becomes the Taproot internal key for a P2TR deposit address (BIP-341). The address also commits to two CSV recovery script-path leaves for unilateral recovery. The result is a unique deposit address per user — no seed phrase, no browser extension, just a biometric. Each user is also assigned a unique 6-character invite code (e.g.A3K9F2) for the referral system.
2. Deposit
The user sends BTC (or Runes) to their deposit address. The platform monitors the mempool and blockchain for incoming transactions. Deposits progress through three states: mempool (detected but unconfirmed), confirming (included in a block), and credited (meets the confirmation threshold, currently 1 confirmation). Optimistic credit is applied at the mempool stage for a faster UX.3. Swap
Bitrune supports BTC-to-Rune and Rune-to-BTC swaps through constant-product AMM pools (x × y = k). Two execution paths exist: virtual swaps for pre-etch Runes (balances updated internally only) and on-chain MuSig2 swaps for post-etch Runes (a signed Bitcoin transaction moves real UTXOs). A 0.3% fee is deducted from each swap and accrues to liquidity providers.
4. Liquidity Provision
Users deposit BTC and a Rune at the current pool ratio to become liquidity providers. In return they receive LP shares proportional to their contribution. Minting and burning of shares follows a constant-product model. LP providers earn their pro-rata share of swap fees. A separate protocol fee (kLast accrual) may apply.
5. Mining
Users can stake LP-Rune tokens into mining pools to earn BITRUNE rewards. Rewards are distributed per-block based on the proportion of staked shares. Users can unstake at any time and claim accumulated rewards via MuSig2 cooperative signing.6. Referral Rebate
Every user has a unique invite code. When a referred user trades, the referrer earns BITRUNE rewards proportional to the trade volume. Users can bind a referrer via invite link (?ref=CODE) at registration, or manually enter an invite code afterward. Referral binding is one-time and immutable.