Bitcoin Runes Activity Drops Significantly, Weeks After Generating $135 Million in Fees

Activity on Bitcoin’s Rune protocol dropped significantly, with data showing it reached its lowest level on May 11.

The Runes protocol has been shaking up the crypto space since its launch on April 19, coinciding with the latest Bitcoin (Bitcoin) halving event. The protocol’s debut on April 19, which coincided with the last Bitcoin reduce by half, was nothing short of a blockbuster. This led to a surge in Bitcoin transaction fees, raising a record $107 million in a single day and US$135 million in the first week.

However, the enthusiasm surrounding Runas appears to have cooled in the weeks following its release. According to data compiled by crypto analyst Runes Is in a Dune analytics dashboard, activity has slowed since the initial frenzy, with crucial growth metrics witnessing a notable decline.

According to the data, since May 1st, only 5,023 runes have been engraved, compared to the 9,639 engraved on April 30th alone. At that time, May 11 recorded the lowest write activities at 129.

Rune engraving activity | Source: Dune

In terms of transaction volumes, April 20 and 23 were good days for Runas, with the protocol asserting its dominance by claiming an impressive 77% and 69%, respectively, of transaction shares on the Bitcoin network.

This move was warmly received by the mining community, which saw its earnings take a hit following the Bitcoin halving, which reduced block rewards to 3,125 BTC.

Additionally, the Rune protocol affected Bitcoin’s average transaction fee. In early April, transaction fees hovered around $5. However, they skyrocketed to over $128 on April 20, following the launch of Runas, and marking an all-time high, as reported by Y Charts.

However, subsequent days witnessed a consistent decline in Runas transactions, accounting for less than 30% of total transactions on the Bitcoin network until May 5th, when a reversal occurred.

Runes vs other Bitcoin transactions | Source: Dune

May 11th marked a new low in Runes activity, with the protocol experiencing its lowest levels of engagement yet. New coins decreased and fewer new wallets interacted with the protocol, resulting in a decrease in fees generated.

While analysts are still figuring out the exact cause of the decline in Rune activity, it is against a backdrop of reduced on-chain activity on the Bitcoin network, where several metrics including transaction volumes, daily active addresses, and whale transaction counts are approaching their lowest levels in nearly a decade.

Although unconfirmed, it is not unlikely to assume that the general slowdown in the broader Bitcoin ecosystem may have also affected activity on the Rune protocol.

The Fungible Token Protocol represents a significant leap forward in Bitcoin blockchain technology, enabling multiple token standards through the UTXO model and OP_RETURN opcode.

This innovation offers a more efficient tokenization solution compared to older standards like BRC20, primarily serving meme coin trading on the Bitcoin network.

Despite the slowdown, certain Rune collections continue to have high market valuations, suggesting a resilient market niche within the protocol ecosystem.

Additionally, Casey Rodarmor, the brain behind Bitcoin Ordinals and the Runes protocol, also suggested in a generative reactive audio art project at a recent Ordinals event in Hong Kong, further highlighting the innovative spirit that drives the Runes ecosystem.

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