Author: Arijit Sarkar, CoinTelegraph; Compiler: Tao Zhu, Golden Finance
The Bitcoin Rune protocol is struggling to maintain its share of Bitcoin transactions. Since its launch on April 20, Rune transactions have dominated Bitcoin blockchain traffic on eight different days, most of which were on weekends.
The launch of Bitcoin Rune coincided with Bitcoin's fourth halving. The resulting hype caused a surge in transaction volume on the Bitcoin blockchain. Bitcoin mining revenue exceeded the $100 million mark for the first time, with daily revenue hitting a record high of $107.7 million.
Users spent $2.4 million in fees to inscribe runes and rare satoshis on the first halving block. Source: Mempool.space
As of April 24, transactions on the Runes protocol accounted for more than 50% of all Bitcoin transactions. The peak occurred on April 23, when these transactions accounted for 81.3% of the network. However, by May 2, this number had dropped to 11.1%.
Bitcoin transaction share by protocol type. Source: Dune Analytics
As shown in the Dune chart above, the hype for Rune heated up again over the weekend of May 4th, 5th, and 6th. However, it has been trending downward since then.
As of May 22, Runes accounted for 12.7% of Bitcoin transactions, far higher than Bitcoin Ordinals (0.7%) and BRC-20 (1.5%). BTC took up the rest. As a result, Rune transaction volume has fallen by more than 84% since its all-time high.
Runes are part of a broader developer movement known as Bitcoin decentralized finance (DeFi), or BTCFi, that aims to add more utility to the Bitcoin network. Adding the newly launched protocol to Ordinals and BRC-20 has helped the Bitcoin network hit a new all-time high of 926,000 daily transactions.
Total number of Bitcoin transactions, historical chart. Source: Glassnode
However, the real market opportunity for the Rune Protocol may only emerge a few months after the first wave of investor hype subsides.
Nazar Khan, co-founder and CEO of TeraWulf, said in an interview: "Runes and ordinals are demonstrating the value of block space...The Bitcoin network is the most decentralized, secure, and powerful network in existence, so it will be the use cases and value that will be derived from that block space."
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