Valve's Proton is a fork+bundle of Wine. Proton is widely used, and works fabulously and often seamlessly to play Windows games on Linux, to the degree that Windows games often work better on Linux than they do on Windows, and Windows games often work better on Linux than the Linux versions of the same game.

I would guess that the number of Proton users is orders of magnitudes higher than the number of vanilla Wine users.

I am willing to agree. I am not exactly a super casual user, but I ran into issues with setting up Wine for some games. Proton, by comparison, allowed me to play Fallout 3, Final Fantasy XI and Adom with no special settings ( although admittedly, Adom technically did not need that treatment ). It is crazy how good it has become.

Just for proton work alone, Steam gained a lot of goodwill from me. And that is not to diminish Wine. There is clearly a need for a tool that has the ability to run custom verbose scripts, but Proton mostly solved the gaming piece.

It can't diminish wine, because the work flows mostly from folks employed by codeweavers who contribute to proton, and then when fixes can be generalized, they get merged back into wine proper.

What exactly is the difference between Wine and Proton?

I just use Wine, mostly with older games from GOG.com, and it seems to work alright in all but a few exceptional cases (and has for long before Valve got involved with Proton).

Source is here: https://github.com/ValveSoftware/Proton

Notice that includes a lot of git submodules; the big one is Wine, but it also includes forks of dependencies such as ffmpeg.