Rune protocol activity sees a substantial decrease

Since its much-hyped debut during the last Bitcoin halving, the activity of the Runes protocol has seen a significant drop.

The protocol, which allows users to create fungible tokens on the Bitcoin blockchain, saw a spike in transactions initially, but activity has since slowed, particularly on May 10.

Declension of rune protocol

According to data from a Dune Analytics dashboard, the protocol’s fee income has steadily declined since its launch. While Runes continues to generate notable commissions on a daily basis, surpassing $1 million only twice in the last 12 days means that the trend is on a downward trajectory. This decline contrasts with the frantic activity witnessed during its first week of trading.

Runes, created by Ordinals creator Casey Rodarmor, entered the market on April 20, coinciding with Bitcoin’s halving. The launch sent investors into a frenzy, leading to soaring transaction fees and record profits for Bitcoin miners, surpassing $135 million in costs in the first week alone. However, the excitement has since died down.

Data from Dune Analytics reveals that Runes-related transactions dominated the Bitcoin network until April 24, with the protocol claiming an 81.3% transaction share as of April 23. This domain declined steadily over the following days, reaching a low point on May 2 before showing signs of recovery from May 3. Despite this attempt, activity levels have not been able to return to their initial levels.

The decline in rune activity comes as Bitcoin miners face reduced income. In May, miners’ total earnings fell to less than $30 million a day.

Runes thrive amid the slowdown

Despite the slowdown, Runes has seen remarkable success, with several Rune collections boasting market caps in the hundreds of millions of dollars, according to Magic Eden data.

Runes like Ordinals allow for different token standards on the Bitcoin blockchain. It leverages Bitcoin’s UTXO model and OP_RETURN opcode to provide a more efficient tokenization solution than the BRC20 standard, resulting in more meme coin trading activity on the larger blockchain.

The Bitcoin network also recently processed its billionth transaction, achieving an important milestone. This is a result of the increase in daily transactions over the past month, caused by the introduction of new protocols such as Ordinals, Runes and the BRC-20 token standard.

Meanwhile, developer Casey Rodarmor, who also created Bitcoin Ordinals, recently mocked an audio-reactive generative art project at an Ordinals event in Hong Kong.

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