Runes Protocol Activity Declines After Initial Surge

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Key Takeaways

  • Fees collected by Runes fell drastically from $135 million in the first week to surpassing $1 million twice in the past 2 weeks.
  • Runes protocol experienced the fewest number of new mints and interactions between new wallets on May 10

The buzz around Runes, a new protocol allowing token creation on Bitcoin, appears to be fading. Launched on April 20th, the same day as Bitcoin’s halving event, Runes generated significant excitement among investors. The Runes Protocol on BTC utilizes a UTXO-based system to enable the creation, management of fungible tokens directly on the blockchain.

Creator Casey Rodarmor, also behind the Ordinals protocol, saw Runes transactions dominate the Bitcoin network, reaching a peak of 81.3% on April 23rd. This surge coincided with a spike in Bitcoin transaction fees and record profits for miners impacted by the halving.

However, data from Dune Analytics suggests a sharp decline in Runes activity since its explosive debut. The number of newly minted tokens and interacting wallets has dropped significantly. Fees collected by Runes have mirrored this trend, falling drastically from a staggering $135 million in the first week to just surpassing $1 million twice in the past twelve days.

The latest development comes amid Data from blockchain analytics firm Santiment indicating that Bitcoinโ€™s on-chain activity has reached its lowest point since 2019. Runes Protocolโ€™ launch on BTC halving day triggered record transaction fees and volumes for the blockchain network.

ย BTC fees had surged substantially after Runes launched on the flagship cryptoโ€™s blockchain. Experts had then attributed the fee hike to frenzied investors fighting for block space. Hence, Runes generated a staggering $135 million in transaction fees in its very first week itself

While the initial frenzy has subsided, Runes hasn’t entirely stalled. According to Magic Eden data, some Rune collections still boast valuations in the hundreds of millions.

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Saniya Raahath
Saniya Raahath

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