Leading non-fungible token trading platform, the Magic Eden Ordinals marketplace announced on October 22 that it would pause trading of BRC-20 tokens. The firm called this a precautionary measure to protect its users while a complete consensus on Ordinals Inscriptions is reached.
Upgrades Pushed Miners’ Revenue to Record Highs
The usage of the Bitcoin BRC-20 protocol and Ordinals Inscriptions surged to record highs when they were introduced, but now the situation has made a 180-degree turn. Bitcoin miners who enjoyed a significant amount of transaction fees via BRC-20 tokens have taken a hit despite the increased excitement these new upgrades initially brought.
Interestingly, the Bitcoin BRC-20 standard and Ordinals Inscriptions debuted after the November 2021 Taproot upgrade. The excitement surrounding the new upgrade pushed the BTC price to its all-time high of $69,000.
It is important to note that BRC-20 tokens make use of JSON (JavaScript Object Notation) Ordinals Inscriptions to execute token contracts, generate new tokens, and transfer tokens as well. The innovative upgrades pushed the transaction fees to record highs, and Bitcoin miners gained significant revenue from the same.
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BRC-20 Usage on a Decline
Interestingly, the situation seems to be changing. As per data from Dune Analytics, BRC-20 transactions recorded a massive peak of well above 400,000 transactions. However, in October, the number was significantly reduced to 1,000.
In September, BRC-20 transactions accounted for over 60% of the total transactions on the Bitcoin network, contributing to more than 30% of the fees collected by the network. The chart below from Dune Analytics confirms this data:
As of October, BRC-20 transactions represent less than 2% of the overall BTC transactions, with these transactions contributing to less than 1% of the fees collected by the Bitcoin network. On the other hand, Ordinal Inscriptions also face a similar decline after soaring adoption rates earlier this year.
Related reading: Bitcoin Developers Community In Heated Debates Over Ordinals
Dune Analytics data reveals a previous significant surge in Ordinal Inscriptions, peaking at 400,000 in September. However, there has been a notable decline recently, with daily inscriptions now standing at less than 6,000. Concurrently, daily fees have dropped from 8 BTC in September to under 1 BTC presently.
Interestingly, the Ordinals Inscriptions saw a shocking daily fee peak of over 257 BTC in May 2023.
Magic Eden Ordinals Marketplace Following a Trend?
The decision taken by Magic Eden seems to be part of a broader trend. Additionally, Bitcoin dominance surged to a two-year high, according to The Block’s data dashboard. The dominance level moved from approximately 38% at the start of this year to 48.85% on October 21, marking its highest level since April 2021.
At the time of writing, Bitcoin dominance was sitting at %52.25.
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