[funky music] Welcome back to the BitQuen season two weekly update.
This is a little bit of a break from the traditional podcast interview form, where I will every Monday, about midday US time, take you through an update and we will cover all the metrics in the Ordinals ecosystem, Bitcoin broadly, uh, Runes, Bitcoin tech.
Um, so gonna try to package it all into 15, maybe 20 minutes or so, keep it pretty tight. This is in video format live stream on YouTube and X, on Blockspace Pod and Blockspace Media on YouTube.
And also if you're listening, I'll try to describe what I'm looking at visually. It's a lot of graphs and charts, but, uh, this is gonna be packaged pretty tight, and this will be every week, every Monday around midday.
So make sure to like and subscribe, go to the relevant podcast streaming application where you can find it. Make su- sure to hit like and subscribe and notify and all that stuff, click the bell on YouTube.
So anyway, let's just get right into it. Um, we're gonna kick it off with, uh, Bitcoin. So let's, let's review the metrics.
Uh, my favorite Bitcoin metrics place to start is going to be on mempool.space, um, where we can take a look at the current fee regime and how blocks are coming in.
Um, you know, I just tweeted, uh, just last night, you can see here that, um, we're about a third of the way into the, the difficulty adjustment, which happens about every two weeks, and we're already targeting, um...
Last time we were targeting, like, plus 12% upwards. Right now we're targeting about 8.3%, but blocks are coming in really, really quickly.
They're coming in, um, around the low nine-minute mark, which again, the target is 10 minutes, but this is pretty significant because if we look at the, uh, the graph of hash rate on Bitcoin, if we look right here,
um, this is an important mining metric that a lot of miners look at.
But, um, you can see here, uh, hash rate took a nosedive after the halving, um, declining from about, uh, 650 exahash down to, I think the, the lowest rolling average is about 520, 530, which is a very significant drop-off.
Um, but we're climbing back up, so hash rate seems to have recovered, is recovering really, really quickly, and this is surprising. So this is gonna result probably in a, in a significant upwards difficulty adjustment.
Let's take a look at the pools. Um, over here again, mempool.space, a pretty simple place to detect, to check like which pools are growing or shrinking, and Foundry still leading the pack.
AntPool has gone up from I think 24% to 27%, um, uh, percent of blocks produced, and this is again, um, a rolling one-week, uh, block window.
So that's about a little over 1,000 blocks that this is averaging from. Um, back to the fees. Again, fees are in the low teens right now.
They peaked down into the single digits, and they've been hovering in the, like, seven to nine sat per vByte range, which is uncharacteristic for the past year. If you've been watching the past year...
Let me go to mempool.space's fees. I will just kind of reprise this, but it's been, um, it's been a heck of a past year for fees.
Basically, prior to Ordinals, most of 2022, Bitcoin's fee market and on-chain activity was virtually non-existent.
Then there was a before and after when Ordinals come onto the scene February, uh, and March, both significant fee accrual events.
And then we have the fungible token era of Bitcoin, which is May 2023, and most notably winter of 2024, where we saw some crazy fee spikes.
Then if we're gonna continue talking about fee spikes, we saw a, a wild localized event.
Um, here I'm zooming in on the halving from about a month ago, April 20th, where we saw the weekend of the halving, fees spike into the thousands of Satoshis per vByte, um, as, uh, the Runes protocol launched and transactions started bidding up against each other.
So that's gonna... I'm gonna keep that pretty tight on the, [clears throat] uh, Bitcoin metrics. Um, let's stay here.
I'm gonna start including some Bitcoin metrics that I don't think a lot of other folks are talking about.
You don't see a lot of crossover here between, I would say, the, uh, the new Bitcoin layer two landscape and the, like, regular weekly Bitcoin metrics review. So I'm gonna jump into this Dune dashboard from Thesis.
They have a couple self-described Bitcoin L2s. Um, again, frankly, most of these are, some are multisig-type, uh, layer, uh, trust model.
Um, but they have some good breakdowns on the amount of capital, like, circulating in these ecosystems. Um, let's start with Bob, Build On Bitcoin, um, from Interlay Labs and, uh, partnered with Marathon. Um, Bob has...
Uh, let's just take a look at the assets on Bob.
About half of it is wrapped- Bitcoin, that's the WBTC that you know and love on Ethereum, and then you kind of have a who's who of, uh, other various Bitcoin and other digital assets.
TBTC, which is the Thesis's, uh, uh, effectively, uh, Bitcoin peg. Uh, Esa, that's sovereign, and staked ETH USDT. Um, [clicks]
they even include some Alex, which is a Stacks, uh, Bitcoin chain. Um, the TVL on Bob is 300 million. So this is significant, like, value that's locked up into a multisig that references off-chain. Um,
de-da-deposits have been increasing pretty c-considerably, pretty linearly over the past two months, as Bob continues to roll out and campaign for more user deposits. Um, let's go to Meso.
This is the, uh, layer that the creator of this dashboard, Thesis, is affiliated with. They have about 120 million in TVL. Uh, it's, right now it's only one direction you can lock up your Bitcoin into their layer.
It's about 1,000 wrapped Bitcoin. Um, 5,000... 5,500 active addresses. Um, so they've had a pretty consistent deposit into this, uh, layer over the past two months.
Again, you saw a lot of this activity launch in March and continue to, like, ramp up over the past three months.
So this will be interesting as we head into what we might call, like, [chuckles] layered Bitcoin summer, if you wanna call it that. Um, and then last but not least, actually it is the most, we have [chuckles] Merlin.
Now, if you are in the US and you're not typically dialed into the landscape of, uh, like, [chuckles] um, I'd just be frank, kind of like Asian speculative markets, this may be a surprise to you, but this is the, one of the largest, [chuckles] uh, Bitcoin self-described L2s, with $1.4 billion in Bitcoin, um, locked up, or 1.4 billion in TVL.
You have 20,000 [chuckles] staked Bitcoin. Um, you have a staked ETH product on this as well. And you saw that, um, assets being, uh, staked on Merlin skyrocketed when the chain...
when deposits into the chain, I'm gonna use the word chain loosely here, um, uh, opened up in February of 2024. You saw about 28,000, 29,000 Bitcoin worth of, uh, Bitcoin-denominated assets flow into this,
and then you saw the great Merlin chain unstaking event of late April, early May, where about, um, 25% to a third of the assets on Merlin were withdrawn.
Merlin was able to process the majority of those withdrawals, I assume. It's been hard to keep track of exactly where, um, where things lie here, but, uh, Merlin has, uh, the assets locked up on Merlin have plateaued.
We'll see how, uh, this particular self-described Bitcoin layer, um, uh, progresses forwards. I think with, uh, $1.5 billion worth of assets on this, it's certainly worth paying attention to. So
ordinals. I'm kinda surprised that more people aren't looking at the dashboards, specifically Data Always' dashboard for ordinals. Um, this is my go-to place, dune.com/data_always/ordinals.
We're at 66.7 million inscriptions, the majority of which are still BRC-20 events, although BRC-20 has dropped off. This is the chart that I think really tells the tale, which, uh,
um, if you're listening, you can't see it, but basically we saw pretty regular aggressive inscription activity from genesis to date, until notably April 20th.
On April 20th, the halving happened, and new inscription volume dropped off a cliff. We have not seen ordinals be this dead since October of 2023, when the, um, infamous Sofon was active.
The Sofon, if you remember, was that BRC-20, like, uh, mitigation or sniping bot, uh, which was really fun, that Rindale from now the Tapper Wizards put out. Um, so inscription activity is significantly down.
I'm gonna skip on down to just one other chart from Data Always, which I think is my other favorite chart, which is the monthly inscription share.
So this chart shows, um, of the inscriptions that are being inscribed, how many of them are JSON, how many of them are text, how many of them are BRC-20s, and how many of them are images, like the pictures, the JPEGs.
And what we're seeing is, I've talked about this a few times over the past year,
um, when fees go down, when just broader inscription activity declines, we see the images as a percent, percentage of overall inscriptions increase. So right now you might say that nature is in fact healing.
Images, JPEGs, now comprise, as of this week, over 50% of all inscriptions monthly.
So whilst, while yes, ac- overall inscriptions are down, and we're only seeing, um, about, I think, a couple million inscriptions a month, um, JPEGs are the images, the art that, you know, Casey originally envisioned when he put out the ordinals and inscriptions standard.
They now comprise the majority of new inscriptions. So this'll be interesting to see. Uh, let's just go to the markets. Again, I'm surprised more people aren't paying close attention to this. This is Domo's dashboard.
Still one of the best, like, high-level market- uh, overviews.
Um, unique users across the Ordinals ecosystem is about 585,000, 2.7 million trades, and look at that, we just ticked over 4 billion in overall volume on, uh, all Ordinals marketplaces, or the dominant ones at least.
Um [clears throat], however, we s- we have seen volume decline pretty linearly since, um, the halving weekend of 4/20.
Um, what, what, what y- was about, uh, a month or so ago of, I think, $40 to $50 million in daily, uh, marketplace volume is now down to, you know,
f- seven or $8 million in daily volume.
Um, I think one of the interesting stories here, again, uh, if you're watching this on YouTube, you can see this, but listeners on the podcast might not, but I'm, I'm looking at a chart here, which is the percentage share of transactions by marketplace, or the percentage share of volume by marketplace.
And what we've seen is a story over the past year and a half since the launch of this protocol, a lot of churn in which marketplaces are doing what volume, which marketplaces are dominating.
We saw, um, OpenOrdex, Ordinals Wallet, OrdSwap, Ordinals Market. Um, we saw Unisat take the reins of this market for a while, but right now it seems to be pretty much a duopoly.
What used to be dominated by Unisat is now e- the OKX and Magic Eden story.
OKX currently does about a third of all, uh, volume by marketplace, and Magic Eden is now the clear market leader with two-thirds of all transaction activity, uh, for, uh, market, uh, on all, all marketplace volume acro- uh, across the Ordinals ecosystem.
I think what's important is that we saw, and I talked about this in previous livestreams that I've done, [clears throat]
OKX really took the lead on capturing the Asian fungible token market, um, particularly in, uh, summer of '23, and really peaked in winter of '23 during, I call, like, the Great Fungible Token Cambrian Explosion.
Um, but since then, and really post-Runes, Magic Eden has begun to dominate the new, uh, market of... the, like, new volume in the market. And I th- that's because as we'll...
when I switch to the Runes segment, Magic Eden's really captured the Runes market, so this is a very interesting story to watch. Um,
the last metric on unique users is this chart here, which kinda describes new user growth entering the space. Um, black is OKX, orange, or light orange is Unisat, and orange is Magic Eden. Um,
we can see during, uh, you know, high growth periods, like the, the advancement of new users, uh, entering the ecosystem is pretty significant, but we've seen very few new users, um,
onto the broader Ordinals, and I think this probably describes the, the Runes ecosystem as well. Not a lot of new user growth in the past month.
Um, maybe we're all just counter-trading each other and, uh, are each other's exit liquidity, but right now user growth is flat.
We've seen this, though, and we saw flat user growth, um, August through September of last year. We saw flat user growth April of last year. So we're in another, you know, you might call it consolidation period.
Um, their Runes didn't have this immediate onboarding effect that other, um [clears throat], that, that maybe a lot of people expected. Um, so let's just go to Runes. Um, we're gonna transition to genie data dashboards.
Um, great... It's kinda like, I would say it's like the Dune of Ordinals and Runes. Um, this is my current working dashboard from Poshi, P-O-S-H-I. Um, and the overall Runes market cap, again, this is a bit hand-wavy.
It's hard to really estimate. A lot of this is liquid. Current, uh, Runes market cap, $1.5 million. 1.5...
Sorry, $1.5 billion, 1,500 million, um, which is significant because, uh, you know, Casey said he would, quote, "Commit seppuku if Orn's, uh, Runes was not over a billion dollars." Um, but it now is.
Now, uh, Casey's HP, this is my other favorite, uh, tracker on here, is at 56%. That's because, um, th- we are 56% over Casey's threshold for surviving the Runes apocalypse if Runes as a token standard fails.
Um, we're seeing about 15,000, uh, unique sales over the past 24 hours, um, and, uh, the daily volume for Runes has roughly been flat almost the entirety of May.
We saw a little peak about a week ago, and I wrote a blog for Blockspace a- you know, asking, "Are Runes back?" Well, Runes [audio glitches] the prices are going up. Volume's been flat. So I think, um, yeah.
What's interesting is, like, we've seen, uh, a, a bit of a recovery in, uh, Runes ticker prices. I'll hit that on the next slide. But I wanna talk about the daily exchange volume, because this is, I think, the main...
one of my favorite stories to watch, which is which exchanges are winning the exchange war for market share? So initially we saw, uh, Unisat, um,
uh, Unisat and, uh, Magic Eden and, um, I believe OKX launch, and it's been a pretty competitive environment.
So right now, uh, Magic Eden and OKX Are the, uh, market leaders for exchange in Runes, but it's really just, um, three main exchanges which have, uh, immediately from day one dominated the market.
OKX with about 2.5 to three billion, uh, dollars per day in marketplace volume. Uh, Magic Eden with about 2.5, and Unisat with never...
I don't think Unisat ever has crusted, crested over a mil- a billion dollars sin- or a million dollars since, um, the first launch weekend. Um,
the other thing is, while, yeah, Runes and Runes Ordinals activity seems to be [chuckles] significantly down, like, um, this other dashboard from O- PoShi tells another story, which is right now, Runes, in the past 24 hours, comprise three-quarters of all Bitcoin transactions.
To me, this is a story of Bitcoin activity, the secular activity on Bitcoin, largely being down.
Um, we don't see a lot of use of Bitcoin's base layer for transaction activity, um, 'cause right now most of it's for Runes.
Um, and, and not only that, but it's not really Runes transfers or trades, it's all Runes mints. There's about, uh, half a million, uh, Runes mints every 24 hours right now.
Um, lastly, for the, uh, Runes coverage, uh, we... let's just take a look at the top tickers. We have Dog Go To Moon, um, with about $400 million in market cap. RSIC close to 200. Satoshi Nakamoto, Decentralized, WENCO.
Um, we... I think the top 10 Runes by market cap, the smallest one is only, um, a couple mil- is, uh, is around $10 million in total market cap. So, um, the market continues to accrue value. Bitcoin's up to 70,000.
Let's go to the news. So, um, I think I'm gonna switch gears here and throw, um, most of the listeners here a curveball, where, um, this is not just an Ordinals or Runes show. I think one of the, the biggest...
my favorite news events this week is there's a lot of development on the ChaMian eCash narrative.
Now, this has been mostly localized to, like, hardcore Bitcoin circles and the, like, hardcore Bitcoin, like, Lightning proponents. But, um, this was a big week for the eCash narrative.
eCash we might call, like, a layer three on top of Lightning, if we wanna call that a layer two. eCash allows private mints, um, which are interoperable with Lightning, to issue, like, tokens to users.
It requires a trusted operator to enter and exit and not rug everybody, but it's being heralded as kind of a last mile payments solution. So,
KaliBTC is one of the, like, main proponents of, of this eCash through, uh, scheme through Cashew. Um, there's various projects, eCash projects, which have, um, come out and circulated, um, from chat applications, to,
um, kind of, uh, various referral or trust models, um, faucets, um, a lot of Nostr integrations. Uh, I think it's been a pretty fun narrative to watch.
Um, so dive into the Cashew protocol, docs.cashew.space, or if you want, follow KaliBTC on Twitter. I also recommend following Alex B on Twitter. That is, um, Berg Alex Four. He works for Bitcoin Magazine.
He tweets a lot about eCash right now. Um, this has been a fun story to watch, um, so I'll be trying out some eCash stuff. I'd love to have and interview, um, some folks about eCash for Bitcoin Season 2 soon.
Um [clears throat], the other news, I think, uh, this has not been circulated enough, I think, outside of this more technical community, is the narrative of the Bitcoin Layer.
So bitcoinlayers.org is one of the landing places for what I think is the, kind of s- the... a great study of, uh, of the risk models and categorization of all these things that we call Bitcoin layer twos. Now,
I don't think it's really clear what a Bitcoin [chuckles] layer two is in a lot of these cases. Some might say there are no Bitcoin layer twos.
But at least bitcoinlayers.org, um, has a group of folks who are trying to develop a systematic, um, monitoring categorization and classification of a lot of these Bitcoin projects.
There's a ton of money being invested into this sector, um, and it's not really clear how to evaluate and make decisions across the space. So bitcoinlayers.org,
um, is working through the landscape of popular Bitcoin L2s.
You have CoreDAO, ICP, Lightning Network, Liquid, Merlin Chain, Rootstock, Stacks, um, where [clears throat] they describe, like, trust models, the type of layer two it might be, whether it's in s- you know, testnet or mainnet.
Um, is it Bitcoin-denominated? How big is it from a, like a value locked standpoint? So, uh, I think this is a really interesting project. I would be paying attention. They do weekly dev calls if you hop in the Telegram.
You can find this on bitcoinlayers.org. Um, and last as far as news, uh, I'm gonna skip over the Trump stuff. I'm gonna skip over the, like, the politics stuff. You can see other people talk about that.
I think one of the most important news events this week was more just the commentary surrounding Michael Saylor's interview with Peter McCormack on What Bitcoin Did.
Um, Michael Saylor spoke a lot about, um, his views on Bitcoin scaling or not scaling or, um, soft forks and, um, sparked a lot of interesting conversation.
Uh, I'll try to be neutral on it, but- Um, he speaks,
you know, he says things, um, as Wicked Bitcoin here, uh, summarized, "At some point, we're sacrificing the interests of sound money in pursuit of the ideal of sovereignty of the individual, and it's not clear to me that you get both."
So this is commentary on whether Michael Saylor thinks we should, um, aggressively or not aggressively pu- pursue a soft fork, or if ever.
Michael Saylor appears to be one of the voices of the more or less ossificationist camp. That is, the camp that does not want to change Bitcoin.
Contrast this with the cat camp, or the slow and steady camp, or the pro-soft fork camp, the Great Script Restoration Project.
If you don't know what those words mean, read some of the previous Blockspace e- uh, newsletters. Um,
so, uh, Michael Saylor talked a lot about his views on, um, developer activity, Bitcoin developer activity, Bitcoin developer funding. Um, I think he came largely on the side of,
uh, like, Bitcoin developers are too eager to change things. It, it risks my bags. He has some arguments against that. I fall on the side of the critics of his statements here.
I think that sovereignty is something to be pursued, and actually, uh, my opinion is that sovereignty, um, uh, is more important than sound money. So I'll be on the record saying that. Um, so this is very interesting.
I recommend everybody listen to the Saylor interview, and then also listen to, and pay attention to the conversation around the critiques of it. On to the next, what's happening next?
Well, this week in Ordinals land, we have Ordinals Lisbon. It happens tomorrow, or actually in Lisbon time, it's actually happening in about a few hours. Um, this is a side event to NFC Lisbon,
which is kind of an NFT-type tech, Bitcoin and crypto tech conference. Ordinals Lisbon, uh, again, Trevor Owens and the Pizza Ninjas are kind of spearheading this. You got a lot of really good speakers here, um,
you know, from Query of Magicat to OrdinalsBot guys, to Bitcoin Frontier Fund, Ordinalie on the Ordinals core team, Brandon Bailey, friend of the show, Second Gate Advisory.
So, um, you know, if you're there, you're probably not watching this, but if you're not there and you don't know what's going on, I would be looking out for news and, um, you know, things that happen, the news cycle that, that surrounds one of these conferences.
Last on the next, um, here's a preview about, of the blog that's going out tomorrow on the, uh, uh, Blockspace pod- Blockspace Media newsletter. Um, is everything about to go bananas?
This is, uh, my treatment of Raoul Pal's famous banana zone meme.
Uh, if you've seen this and you've been seeing the banana emoji or references to banana zone, this is in reference to the term coined by, quote, "smooth-talking Raoul Pal for a potential scenario where macro liquidity cycle coincides with the seasonal crypto summer and everything goes bananas."
You know, if you're a seasoned, um, uh, crypto, uh, enjoyer, you know what the banana zone is.
But what's funny is, you know, even though Raoul Pal tends to, like, use his primarily boomer audience as eggs liquidity, like, um, it, it feels like, my, my take in this, in this piece is that it actually kind of feels a bit natural to, that he might actually be right in that, like, you know, if you've been here a while, you can see that things do seem to f- they feel poised.
So, um, shout out Raoul Pal for introducing yet another goofy chart that we can pay attention to. I call this the crypto seasons chart.
We can put this up there with Eric Wall's rainbow chart, with Fred What's His Face's, uh, um, power law chart, with the Segwit2FX, LMFAO, whatever all these other charts are.
So add the, add the crypto seasons chart where he just, like, straight up divides the Bitcoin and, uh, like, the NASDAQ and the, the, and the broader crypto market cap charts by, uh, seasons of the year.
So, uh, you gotta love to see it. Um, that wraps up the, uh, this week's, uh, weekly update. Make sure to, uh, put this on your calendar midday on Mondays.
Bitcoin season two, I will hit, uh, like, more of a metrics-heavy and topic and news-heavy, uh, live stream every Monday, uh, streaming live on Blockspace Media X and YouTube.
So once again, thank you very much for joining, and I will see you next week.
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