Bitcoin’s Runes Protocol Witnesses Declining Activity and Fee Revenue

Bitcoin’s Runes Protocol Witnesses Declining Activity and Fee Revenue

The Runes protocol, known for allowing the creation of fungible tokens on the Bitcoin blockchain, has experienced a significant decline in activity since its first week of trading. On May 10, a noticeable decrease in activity was observed, with fewer new mints and new wallets interacting with the protocol compared to previous periods.

According to data from Dune analytics, the protocol’s fee income has been decreasing steadily. Although Runes generate hundreds of thousands of dollars in fees daily on the Bitcoin blockchain, total fees have only exceeded $1 million twice in the last twelve days, indicating a significant downward trend. The launch of the Runes protocol took place three weeks ago on April 19, coinciding with the latest Bitcoin halving event. This debut sparked excitement among investors and led to a surge in transaction fees and record-breaking earnings for Bitcoin miners, who generated over $135 million in fees in the first week alone.

However, Runes-related transactions, which initially dominated the Bitcoin network, have gradually decreased since April 24. On April 23, Runes constituted the majority of transactions, reaching 81.3% of the total, while Bitcoin transactions dropped to 18.15% with Ordinals. and BRC-20 transactions at 0.1% each.

Following this decline, Runes transactions continued to decline until May 2. However, starting from May 3, Runes began to show signs of recovery. On May 4 and 5, Runes managed to achieve over 60% trading share. The increase in transaction fees was initially welcomed by the mining community, compensating for reduced earnings following the Bitcoin halving. However, total revenue for Bitcoin miners fell below $30 million per day in May.