Bitcoin Runes: the NFT protocol with 15.6 million transactions in just 4 months

The successor of the Ordinals, Bitcoin Runes, since its launch 4 months ago has recorded a total of 15.6 million NFT transactions.

Bitcoin Runes, the NFT protocol that was launched in April last year, has now recorded a total of 15.6 million transactions to date. This is according to data from Dune Analytics, which also shows that these transactions have generated a total of 162.5 million dollars in fees.

Bitcoin Runes has seen a lot of activity in the first two months since its launch, with an average of more than 300,000 transactions per day. On the day of its launch, which coincided with the fourth Bitcoin halving, the NFT protocol accounted for 57.7% of the total transactions on the BTC network, generating a total of 80 million dollars in fees.

By April 23, Bitcoin Runes NFT investors had already clocked more than one million transactions, which represented 81.3% of the total bandwidth of the Bitcoin network.

However, these last two months have seen an initial decline in transactions, with an average of about 50,000 daily transactions.

In another analysis from July 2024, it was revealed that the average daily transactions of Runes from June 22 to 28 were just 37,820. This marked a drop of over 90% compared to the daily average of 330,000 that was recorded between June 9 and 15.

June 24th saw the lowest activity for Bitcoin Runes NFT, with only 23,238 transactions being executed.

It's worth noting that even the Ordinals protocol for creating NFT and BRC-20 tokens had seen a similar decline in the past. For instance, in January 2024, BRC-20 had reached up to 75% of the share of all transactions on Bitcoin. But by July, such transactions didn't even reach 0.5%, largely due to the displacement by Runes.

Both Runes and Ordinals, as well as the BRC-20 standard, share the commonality of being three protocols that enable the creation of NFTs on the Bitcoin blockchain without using smart contracts.

Starting with Ordinals, it became possible to inscribe the metadata on individual satoshis, resulting in digital artifacts that are distinct from each other and have their own characteristics.

Soon after, the BRC-20 arrived, and by May, it had introduced NFTs on Bitcoin for the first time. This led to the arrival of memecoins on the BRC-20 standard, which pushed on-chain activity to all-time highs. Some of the BRC-20 tokens were also listed on major crypto-exchanges, such as ORDI.

However, the creator of Ordinals Bitcoin, Casey Rodarmor, went on to criticize the BRC-20 tokens, highlighting the issue of an undesirable proliferation of UTXO (Unspent Transaction Output) on Bitcoin wallets.

This eventually led to the proposal of the Bitcoin Runes protocol, which uses a different approach from the previous two to create its NFTs. While both Ordinals and BRC-20 NFTs are directly inscribed on the Bitcoin blockchain, Runes NFTs are created by burning a specific amount of satoshis, which are then used to mint the NFT on the Rune.

Specifically, users send a call to the “Rune” on various inputs, which are then transferred and burned through the “OP_RETURN” function. This way, the unspent balances (change) are identified as fungible tokens.