The Bitcoin Runes protocol, launched on April 20, initially caused a significant surge in Bitcoin transactions, peaking at over 50% of all transactions on the network. This surge was largely driven by the hype surrounding the fourth Bitcoin halving, which saw transaction volume on the Bitcoin blockchain increase dramatically.

The launch of Runes coincided with a record-breaking day for Bitcoin mining revenue, which exceeded $100 million for the first time, reaching an all-time high daily earnings of $107.7 million. Users spent $2.4 million in fees to inscribe runes and rare satoshis on the first halving block, demonstrating the enthusiasm and interest in the new protocol.

However, since its peak on April 23, when Runes transactions accounted for 81.3% of the network's bandwidth, the protocol's share of transactions has steadily declined. By May 2, this figure had dropped to 11.1%, and as of May 22, Runes represented 12.7% of Bitcoin transactions, still higher than Bitcoin Ordinals (0.7%) and BRC-20 (1.5%).

Despite the decline, the Runes protocol remains a significant contributor to the Bitcoin network's transaction volume, with the network marking a record high of 926,000 daily transactions. The protocol is part of a broader movement to add more utility to the Bitcoin network, known as Bitcoin decentralized finance (DeFi) or BTCFi.

Industry experts, such as Nazar Khan, co-founder and CEO of TeraWulf, believe that Runes and Ordinals are demonstrating the value of block space on the Bitcoin network. Khan notes that the Bitcoin network is the most decentralized, secure, and robust network that exists, and that there will be use cases and value derived from that block space.

While the initial hype surrounding Runes may have subsided, its impact on the Bitcoin network's utility and decentralized finance remains significant. The protocol's ability to drive transaction volume and demonstrate the value of block space on the network highlights the ongoing efforts to enhance the functionality and appeal of the Bitcoin ecosystem.