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Introduction
The Runes protocol, launched on the Bitcoin network, experienced a significant decline in popularity in December 2024. This downward trend is particularly notable given its previously dominant position earlier in the year.
Runes’ Rise to Prominence
Prior to this decline, the Runes protocol consistently held the highest bandwidth on the Bitcoin network. On April 23, it reached an impressive milestone of over 753,000 transactions, surpassing Ordinals, BRC-20s, and even Bitcoin itself. This record accounted for more than 81% of all transactions in the Bitcoin blockchain.
Transactions on the Runes Protocol: A Breakdown
The protocol’s momentum continued through May but began to dwindle in the middle of the month. It then experienced a significant increase in transactions throughout June, only to drop by over 88% towards the end of the month. Despite this, the Runes protocol demonstrated its potential for longevity by recording over 15 million transactions in its first four months.
The Decline of Interest in Bitcoin-Based NFTs
In July, the Runes protocol’s share of transactions fell under 9% on average, indicating a decrease in investor interest in Bitcoin-based non-fungible tokens (NFTs). However, this decline did not signal the end of the protocol’s potential. By August, it had generated over $160 million in fees and reached 15.6 million NFT transactions.
A Brief Resurgence
The protocol experienced a brief resurgence during the month of August, with Aug. 23 recording an impressive 255,000 transactions. However, this momentum was short-lived, as the Runes protocol’s transactions dropped again in September and struggled to reach its previous highs throughout the last quarter of 2024.
Related Developments
The decline in interest in Bitcoin-based NFTs is not unique to the Runes protocol. The broader market has experienced a decrease in investor interest in NFTs, with sales volumes dropping below $300 million for the first time since 2021 in September.
Share of Transactions by Type: A Visual Representation
The following graph illustrates the share of transactions on the Bitcoin network by type:
| Date | Runes | Ordinals | BRC-20s | Bitcoin |
| — | — | — | — | — |
| Apr 23 | 81.1% | 4.5% | 2.3% | 12.1% |
| May 15 | 60.2% | 13.5% | 6.3% | 20% |
| Jun 30 | 42.1% | 21.9% | 10.3% | 25.7% |
| Sep 30 | 8.2% | 24.1% | 14.5% | 53.2% |
Conclusion
The Runes protocol’s decline in popularity is a reflection of the broader market trends. As interest in NFTs continues to wane, the protocol’s transaction share has dropped significantly. While this may be concerning for some investors, it is essential to remember that the protocol has demonstrated its potential for longevity and continues to generate significant fees.
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