The Bitcoin Runes protocol is 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 different days, primarily during the weekends.
The introduction of the Bitcoin Runes coincided with the fourth Bitcoin halving, which generated significant excitement and led to a surge in transaction volume on the Bitcoin blockchain. Bitcoin mining revenue surpassed $100 million for the first time, reaching an all-time high daily earning of $107.7 million.
Users spent $2.4 million in fees to inscribe runes and rare satoshis on the first halving block, showcasing the initial excitement surrounding the protocol.
Initially, transactions attributed to the Runes protocol accounted for over 50% of all Bitcoin transactions, reaching a peak on April 23 when they represented 81.3% of the bandwidth. However, by May 2, this figure had dropped to 11.1%.
The Runes hype experienced another surge during the weekend of May 4, 5, and 6, as depicted in the Dune chart. However, it has been declining since then.
As of May 22, Runes represented 12.7% of Bitcoin transactions, significantly higher than Bitcoin Ordinals (0.7%) and BRC-20 (1.5%). The majority of transactions were still conducted using BTC. Consequently, Runes transactions have decreased by more than 84% from their all-time high.
Runes and BRC-20s are part of the Bitcoin decentralized finance (DeFi) movement, known as BTCFi, which aims to enhance the utility of the Bitcoin network. The addition of the newly launched protocol, along with Ordinals and BRC-20, resulted in a record high of 926,000 daily transactions on the Bitcoin network.
However, the true market potential of the Runes protocol may only become apparent after the initial wave of investor hype subsides. According to Nazar Khan, the co-founder and CEO of TeraWulf, Runes and Ordinals showcase the value of block space. He believes that the decentralized, secure, and robust nature of the Bitcoin network will lead to various use cases and value derived from that block space.
In the midst of this evolving landscape, the SEC faces a formidable battle against the legal firepower of the cryptocurrency industry, much like the clash between Godzilla and Kong.