The Runes protocol, launched on the Bitcoin network in 2024, had an impressive start, but its momentum began to wane significantly by the end of the year. After reaching unprecedented highs in April, the protocol’s transaction count dropped below its previous peaks, leaving many wondering what caused this sudden decline.
A Brief History of Runes’ Rise to Prominence
When the Runes protocol was first introduced, it quickly gained traction on the Bitcoin network. By April 23rd, the protocol had surpassed the Ordinals protocol, BRC-20s, and even Bitcoin’s own native transactions, with an impressive 753,000 transactions recorded in a single day. This marked a new record for the protocol, accounting for over 81% of all transactions on the Bitcoin blockchain.
The Runes Protocol: A Breakdown of Its Early Success
As we can see from the graph above, the number of transactions on the Runes protocol continued to soar throughout May, with a brief dip in the middle of the month. However, by June, the protocol had regained its momentum, recording over 15 million transactions in just four months.
The Decline of Interest in Bitcoin-based NFTs
Despite this impressive start, the Runes protocol’s popularity began to wane significantly in July. The protocol’s share of transactions on the Bitcoin network dropped below 9% on average, indicating a decline in investor interest in Bitcoin-based non-fungible tokens (NFTs).
The Runes Protocol: A Potential Long-term Player
However, this decline did not seem to deter the developers behind the Runes protocol. By August, the protocol had generated over $160 million in fees and reached 15.6 million NFT transactions. While this was a significant achievement, it marked a turning point for the protocol, as it began to struggle to reach its previous highs throughout the remainder of 2024.
A Brief Resurgence in August
Despite the decline in popularity, the Runes protocol experienced a brief resurgence on August 23rd, with a record 255,000 transactions recorded. However, this was short-lived, and the protocol’s transaction count continued to drop throughout September and beyond.
The Decline Continues: Runes’ Transaction Share in December
By December, the Runes protocol had lost even more ground, with its transaction share on the Bitcoin network dropping below 10% for most of the month. The only exception was Christmas Day, when the protocol saw a brief spike to 19.9% share.
The Broader Decline in NFT Interest
The decline in interest in the Runes protocol comes amid a broader decrease in interest in NFTs as a whole. In 2024, NFT sales volumes dropped below $300 million for the first time since 2021, marking a seven-month downturn before briefly recovering in November and December.
A Changing Landscape: Implications for the Runes Protocol
As we can see from the data above, the decline in interest in Bitcoin-based NFTs has had a significant impact on the Runes protocol. While the protocol’s developers have expressed optimism about its long-term potential, it remains to be seen whether the protocol can regain its momentum and reach new heights.
Conclusion
The story of the Runes protocol is one of two halves: an impressive start followed by a decline in popularity. As we look to the future, it will be interesting to see how this protocol evolves and whether it can recover from its current slump.
