P2SH Adoption
Output share of Pay-to-Script-Hash format introduced by BIP16 (April 2012). Includes multisig, Lightning channel funding, and P2SH-wrapped SegWit envelopes.
What is it?
P2SH (Pay-to-Script-Hash) is the format introduced by BIP16 in April 2012 to enable arbitrary scripts without bloating the output format. The recipient provides a script hash and reveals the full script only when spending. This metric computes the 1-week rolling share of P2SH outputs among all created outputs. This category encompasses three distinct uses: pure multisig (custody, escrow), Lightning channel funding, and P2SH-wrapped SegWit envelopes for backwards compatibility with pre-2017 wallets.
How to read
Sustained growth post-BIP16 reflects the progressive adoption of institutional multisig and compatible wallets. The peak visible around 2017-2019 captures the wave use of P2SH-wrapped SegWit envelopes (downward compatibility with pre-SegWit wallets). A progressive decline post-2021 reflects migration to native SegWit and Taproot outputs, with P2SH retained for specific multisig uses.
Key zones
The P2SH share has gone through three regimes: initial adoption (2012-2016, institutional multisig), P2SH-wrapped SegWit migration peak (2017-2019), then progressive decline in favour of native SegWit and Taproot. Zones of stability reflect structurally non-substitutable multisig uses (institutional custody, Lightning funding).
What to observe
Watch the dynamic against P2WPKH and P2WSH (native SegWit outputs) - a clear migration indicates the SegWit ecosystem maturing for compatible uses. The long-term residual share reflects uses where P2SH remains optimal (specific multisig, applications requiring backwards compatibility).
Historical context
BIP16 was activated on 1 April 2012, after several months of community debate over the optimal format for complex scripts. The first wave applications were institutional multisig wallets. The Lightning Network boom from 2018 onwards sustained P2SH use for initial channel funding until the arrival of P2WSH-anchored and Taproot channels.
Expert notes
This metric does not distinguish the three P2SH sub-categories (pure multisig, Lightning funding, P2SH-wrapped SegWit) - it aggregates all of them. A finer analysis would require script-by-script inspection, not available in output aggregates. For pure multisig, cross-reference with address metrics overweighted in BTC (institutional custody).
Common mistakes to avoid
Interpreting the P2SH share as solely 'multisig' massively underestimates the diversity of uses. A P2SH output can be a 2-of-3 multisig, but also a Lightning channel, a SegWit envelope for legacy wallets, or an atypical script (timelock, hash-locked contract). Do not confuse with P2WSH (#368) which is strictly native SegWit multisig.
Programmatic access
REST API
curl -sS \
'https://api.trinityinsights.io/api/v1/onchain/p2sh-adoption/history?days=90' \
-H 'X-API-Key: $TRINITY_API_KEY'MCP server
{
"tool": "get_chart_value",
"metric_id": "p2sh-adoption",
"timeframe": "1y"
}Required tier: pro. See the pricing grid for the tier list and the MCP documentation for multi-client configuration.
Related metrics
Institutional disclaimer
Trinity Insights is an educational and analytical tool. The metric above does not constitute investment advice. Trinity Insights is not a Crypto-Asset Service Provider (CASP) registered under MiCA Regulation (EU) 2023/1114. See the full disclaimer.