Runes tamp down BRC-20 activity

We have talked a bit in the newsletter about Runes. As a recap, the Runes token standard launched at the most recent Bitcoin BTC +0.47% halving in April, and it was initially very popular. At its peak, it accounted for over 80% of transactions on the network and helped push daily Bitcoin transactions and daily transaction fees paid on the network to new heights. 

Runes still captivate the public’s attention, commanding roughly 50% of Bitcoin transactions. However, the need to pay such high fees has subsided as the initial demand to get in early died down.

But where does that leave Ordinals and BRC-20, Runes’ predecessors? BRC-20, like Runes, is also a token standard for Bitcoin, but it's based on the principles that spawned Ordinals, attaching metadata to specific satoshis, differentiated by the order in which they were minted. Runes, on the other hand, uses unspent transaction outputs as an attempt to be a cleaner approach to new tokens since BRC-20 caused a lot of junk UTXOs.

Well, essentially, Runes have usurped BRC-20. While there were numerous days before the halving, when BRC-20 tokens were highly sought after, where there were over 200,000 BRC-20 transactions a day, it is now more common for there to be less than 10,000 transactions involving the old token standard in the wake of Runes. 

Since Runes launched, there have always been at least 150,000 Runes-related transactions on the Bitcoin network. But there’s room for that number to go down as we move further from their hyped-up launch.

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Non-BRC-20 Ordinals transactions were already not as common before Runes, rarely exceeding 100,000 transactions per day. But in a post-Runes world, Ordinals transactions are lucky to reach 5,000.

It is not shocking that Runes would help push BRC-20 to the fringe, given its improvement on the existing standard, but this does signal trouble for some of the biggest BRC-20 tokens. These tokens have faced price crunches both in March as the memecoin rally faded and then again in April as the halving approached and are seeing a continuing decline.

Ordinals, which has more of an emphasis on non-fungible token issuance on Bitcoin, despite being the core idea behind BRC-20, probably had a better chance of dodging the Runes impact. However, it does seem like many people have moved on, as trading concentrates in Runes.

This is an excerpt from  The Block's Data Insights newsletter . Dig into the numbers making up the industry’s most thought-provoking trends.