Runes Protocol Fees Rapidly Decline After Nearly 1 Month Of Launch

Key Points:

• Bitcoin’s Runes protocol fees hit $135 million in its first week of launch.
• Despite the initial hype, activity on the Runes protocol has dwindled since its launch, with May 10 recording particularly low engagement levels.
• However, Runes remains a significant player in the blockchain space, with several Rune collections boasting market capitalizations in the hundreds of millions.

Bitcoin’s latest halving event on April 19 coincided with the launch of the Runes protocol, a novel addition to the blockchain landscape.

Runes Protocol Fee Faces Slowdown After Initial Surge

Developed by Casey Rodarmor, also behind the Ordinals protocol, Runes protocol fees quickly made headlines by generating a staggering $135 million within its inaugural week, as per Dune analytics.

Runes stands out for its utilization of Bitcoin’s UTXO model and OP_RETURN opcode, offering a more efficient tokenization solution than the BRC-20 standard. This enables users to mint tokens, predominantly memecoins, atop the Bitcoin network itself.

Despite the initial Runes protocol fee hype, activity on the protocol has seen a noticeable decline since its blockbuster launch. May 10 marked a particularly sluggish day, with minimal new mints and wallet interactions recorded. Only twice in the last twelve days has the protocol generated over $1 million in fees.

Read more: What is Bitcoin Halving? Why is this event of interest?

Sustained Interest Amidst Declining Activity Signals Future Potential

Nevertheless, Runes remains far from obscure. Various Rune collections boast market capitalizations of hundreds of millions, according to Magic Eden data. This sustained interest indicates potential for growth and development within the protocol.

For Bitcoin miners, the rise in fees is a welcome relief amidst dwindling revenues post-halving. Daily-earnings have plummeted to under $30 million, prompting miners to invest in upgraded technology for improved efficiency and profitability.