Key Points:
- The Runes protocol has experienced a substantial decline in both activity and transaction fees since May 2024.
- The decline has reached a record low, with fees decreasing to 1.49 BTC on May 12, 2024.
- The decline in activity and fees has had a wider influence on the Bitcoin network, resulting in lower transaction volumes and fewer new wallet interactions.
- The decrease in fees has also affected the revenue of Bitcoin miners, which has dropped to its lowest point in several years.
Introduction:
The Runes protocol, a novel token standard used on the Bitcoin network, has witnessed a substantial decline in its level of activity since the onset of May 2024. The decrease has now reached an unprecedented minimum in transaction fees, which is having an effect on the entire Bitcoin network and its miners.
Decreasing indicators in the Runes Protocol
Record-breaking Reduction in Fees: According to Dune Analytics, on May 12, 2024, the Runes protocol within the Bitcoin network had a significant decline in commission volume, reaching an unprecedented low of only 1.49 BTC. This is a significant decline from the surges observed shortly after the implementation of the protocol.
The introduction of Runes immediately following Bitcoin’s halving on April 20, 2024, originally resulted in a significant increase in activity and transaction costs. Upon its initial release, the project amassed an astonishing 1289.26 BTC in fees. Nevertheless, the level of activity and the corresponding fees have experienced a substantial decline since the conclusion of April.
Implications for the Bitcoin Network at Large:
The waning engagement in the Runes protocol has caused a series of repercussions throughout the Bitcoin network:
- Transaction Volume: The daily volume of transactions has significantly declined.
- New Wallets: There is a noticeable fall in the number of new wallets engaging with the protocol for the first time.
Decline in Mining Revenue:
The decrease in transaction fees has had a direct impact on the profits of Bitcoin miners. In early May, the revenue of miners reached its lowest point in several years, with typical fees declining to a range of $2 to $3.
In conclusion
The significant reduction in transaction fees and activity of the Runes protocol underscores the difficulties and instability inherent in decentralized finance systems and their influence on the overall economics of the network. As the protocol faces challenges in sustaining its initial progress, the impact on Bitcoin miners and the general stability of the network is becoming more evident.
