Updated on May 15, 2024: Runes Protocol Witnesses a 99% Decline in Engraving Volume!
The Runes Protocol, an integral part of the Bitcoin ecosystem, is experiencing a significant drop in engraving activity. In late April, an average of 14,700 Runes were engraved daily, but this number has plummeted to below 250 in the past six days. On Monday of this week, only 157 Runes were engraved, marking a 99% decrease compared to its peak.
The total transaction fees accumulated from engraving Runes on May 13 amounted to $3,835, significantly lower than the hundreds of thousands of dollars seen in April. Since the launch of Runes on April 20, miners have earned approximately $4.5 million in transaction fees, averaging $189,000 per day.
To date, over 91,200 Runes have been engraved on the Bitcoin network.
Original report from May 8, 2024:
Declining Interest in Runes Token Trading
Since the launch of the Bitcoin Runes Homogeneous Token Standard on April 20, it quickly dominated the Bitcoin blockchain activity and even led to an increase in transaction fees. However, less than a month after its release, the demand has gradually declined, leading some to question whether Runes was just a fleeting trend. Nonetheless, many experts still see potential in the protocol.
As a new standard for Bitcoin homogeneous tokens, Runes offers a simpler and more efficient system compared to BRC-20, addressing the issues of slow and costly transactions on the Bitcoin blockchain.
According to data from the tracking platform Sat Screener, six out of the top ten Runes tokens experienced a decline in trading volume in the past seven days, ranging from 20% to 57%. The number of engraved Runes has also been decreasing since early May, from thousands per day to just a few hundred.
Web3 collector “Mo” expressed in X that Runes currently lacks substantial applications, making its world an unknown territory with immense potential. “I think there were overly high expectations for the Runes market initially, leading to the dry spell we are seeing now. But patience is needed, and I believe Runes has the potential for continued development.”
Promising Future for Runes
Both Runes and Ordinals, which have seen increasing trading volume over the past year, are protocols introduced by Bitcoin developer Casey Rodarmor. Some believe that Runes may follow the maturity curve of the Ordinals protocol, initially cooling off after an early surge and then experiencing a boom in trading activity and value.
Ordinals Protocol: Introduced in December 2022, this protocol allows users to store images, audio, and other content on the Bitcoin blockchain, bringing unprecedented innovation to the Bitcoin blockchain and often referred to as the “second stage” of Bitcoin.
Yoonsup Choi, Senior Business Development Manager at NFT trading marketplace Magic Eden, shared with Decrypt that the current market decline is expected. However, Choi remains confident in the market for homogeneous tokens on Bitcoin.
He added that previous meme coin launches often troubled investors due to internal issues within the team, such as team members or insiders having priority access to tokens, distributing tokens to multiple unknown wallets, or opaque fund usage. In contrast, Runes is more transparent as the protocol sets specific ratios for team-crafted tokens and provides more detailed guidelines for token creation.
Furthermore, experts point out that once Runes becomes more mature, offering convenient, fast, low-cost, and secure transactions, along with the potential integration with Bitcoin’s second-layer networks to enhance liquidity and usage, the future of Runes remains promising.
BRC-20 Protocol: A homogeneous token standard created by developers through the Ordinals protocol to store special text files and information on the Bitcoin network.
Even though Runes is going through a cooling-off period, it is still too early to determine if it is just a passing trend in its early stages. As the community becomes more familiar with Runes applications, and the ecosystem matures, it is highly likely that the community’s interest will reignite.
Source:
Decrypt,
Cointelegraph Magazine
