The proportion of tokens on the Runes protocol in the total number of daily transactions on the bitcoin blockchain stood at 51.5% on April 24. Traditional BTC operations accounted for 46.9%, according to the Dune dashboard. One day earlier, these values reached 81% and 18.8%, respectively. The total share of Ordinals and BRC-20 did not exceed 2%. Why did these numbers change so much? And what are the reasons for Runes dominance?
The dominance of Runes token transactions on the bitcoin network in recent days has indeed been cause for serious excitement and debate among the crypto community. The main reasons for such a sharp increase in Runes-related activity are as follows:
1. The launch of the Runes protocol itself took place quite recently, on April 20, 2024, the day of the bitcoin halving. This event focused market-wide attention on the new ability to mint tokens on the network in a more efficient manner compared to the previous BRC-20 and Ordinals standards.
2. Massive interest of meme culture and the NFT community in the ability to inscribe rare satoshis into Runes transactions on halving block 840,000. Many have sought to “capture” unique Satoshi combinations as collectible digital assets.
3. The launch of a new and more efficient way to mint tokens on bitcoin always entails a wave of experimentation and speculative activity from developers, investors, and traders.
On the one hand, such high demand for Runes transactions in the first few days significantly boosted the transaction fees for miners, reaching a record $128 on average on the day of the halving event. This suggested the prospect of a transition to a model where the work of miners is paid for mainly by transaction fees. However, after a few days, the proportion of transaction fees from Runes began to decline, and traditional bitcoin traffic again began to generate the bulk of it. This implies that the surge of interest in Runes was largely speculative and short term in nature.
In the long run, the Runes protocol may carve out a sustainable niche in the bitcoin ecosystem for minting tokens. However, it is unlikely that it will completely displace the main bitcoin payment traffic. Instead, Runes will most likely operate alongside traditional transactions, expanding the functionality of the flagship cryptocurrency.