The initial surge in Bitcoin transactions caused by the Bitcoin Runes protocol exceeded 50% at its peak. Has the hype settled down and the congestion cleared?
The Bitcoin Runes protocol has been facing challenges in maintaining its share of Bitcoin transactions. Since its launch on April 20, Runes transactions have dominated the Bitcoin blockchain traffic on eight separate occasions, mostly during weekends.
The launch of Bitcoin Runes coincided with the fourth Bitcoin halving, which generated significant hype and led to a surge in transaction volume on the Bitcoin blockchain. As a result, revenue from Bitcoin mining surpassed the $100 million mark for the first time, reaching a record high daily earnings of $107.7 million.
Until April 24, transactions associated with the Runes protocol comprised more than half of all Bitcoin transactions. On April 23, they reached their peak, constituting 81.3% of the total bandwidth. However, by May 2, this percentage had plummeted to 11.1%.
The excitement surrounding Runes surged again over the weekend of May 4th to 6th, as depicted in the Dune chart above. However, it has been on a downward trend since then.
As of May 22, Runes accounted for 12.7% of Bitcoin transactions, surpassing Bitcoin Ordinals at 0.7% and BRC-20 at 1.5%. The majority of transactions were still conducted in BTC. However, Runes transactions have decreased by more than 84% since reaching their peak.
Runes are part of the broader developer initiative known as Bitcoin decentralized finance (DeFi) or BTCFi, aimed at enhancing the functionality of the Bitcoin network. With the addition of this newly launched protocol alongside Ordinals and BRC-20, the Bitcoin network reached a record high of 926,000 daily transactions.
According to Nazar Khan, CEO of TeraWulf, the true market potential for the Runes protocol might not surface until after the initial frenzy among investors has calmed down. Khan emphasized the significance of block space demonstrated by Runes and Ordinals, stating that the Bitcoin network, renowned for its decentralization, security, and resilience, holds immense potential for deriving value and facilitating various use cases.
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