===========================================================
A Review of the Runes Protocol’s Performance on the Bitcoin Network
In recent months, the transactions on the Runes protocol on the Bitcoin network have experienced a significant drop. This decline has been particularly notable since December, where the protocol’s transaction share fell well below the highs reached during its more dominant months earlier in 2024.
The Rise of the Runes Protocol
After the launch of the Runes protocol, it consistently had the highest bandwidth on the Bitcoin network. On April 23, the protocol reached a record-high of over 753,000 transactions, surpassing the Ordinals protocol, BRC-20s, and even Bitcoin itself. This remarkable feat accounted for more than 81% of all transactions in the Bitcoin blockchain.
Number of Transactions in the Bitcoin Runes Protocol
Source: Dune
Momentum Continues but Eventually Fades Away
The momentum of the Runes protocol continued through the start of May, but unfortunately, it tanked in the middle of the month. However, the protocol saw a significant increase in transactions throughout most of June before dropping by over 88% toward the end of the month.
A Glimpse into the Protocol’s Performance
Runes recorded an impressive number of over 15 million transactions in its first four months. This achievement showcases the potential and interest that investors had in Bitcoin-based non-fungible tokens (NFTs) through the Runes protocol.
Transactions Recorded by the Runes Protocol in Its First Four Months
A Brief Resurgence, but Eventually a Decline
In July, the Runes protocol saw another decline in popularity. The protocol’s share of transactions fell under 9% on average, indicating a decrease in investor interest in Bitcoin-based NFTs.
Potential for Longevity Despite Challenges
Despite this, the protocol showed potential for longevity after recording more than 15 million transactions in its first four months. By August, the protocol had generated over $160 million in fees and reached an impressive 15.6 million NFT transactions. The protocol saw a brief resurgence during the month, with Aug. 23 recording 255,000 transactions.
Struggling to Reach Previous Highs
Then, the Runes protocol’s transactions dropped again in September and have struggled to reach their previous highs throughout the last quarter of 2024.
Decline in Interest Amid Broader Decrease in NFT Sales
The decline in interest in Bitcoin Runes comes amid a broader decrease in interest in NFTs. In 2024, NFT sales had a seven-month downturn before briefly recovering in November and December. The sector hit its lowest point in September when monthly sales volumes for digital collectibles dropped below $300 million for the first time since 2021.
Share of Transactions in Bitcoin by Type
Source: Dune
Conclusion
The decline in interest in Bitcoin Runes is a concerning trend that reflects the broader decrease in NFT sales. However, it is essential to acknowledge the protocol’s potential for longevity and its achievements in generating over $160 million in fees and reaching 15.6 million NFT transactions.
What does this mean for the future of NFTs on the Bitcoin network?
The decline in interest in Bitcoin Runes and the broader decrease in NFT sales raise questions about the future of non-fungible tokens on the Bitcoin network. As investors continue to seek new opportunities, it will be crucial to monitor the development of the sector and its impact on the Bitcoin ecosystem.
Subscribe to our newsletter for the latest DeFi developments and analysis
A weekly toolkit that breaks down the latest DeFi developments, offers sharp analysis, and uncovers new financial opportunities to help you make smart decisions with confidence. Delivered every Friday
By subscribing, you agree to our Terms of Services and Privacy Policy