Updated May 15, 2024: Runes Protocol Witnesses 99% Drop in Engravings!
The number of engravings for the Runes protocol in the Bitcoin ecosystem has experienced a significant decline. In late April, an average of 14,700 Runes were being engraved per day, but in the past six days, that number has dropped to below 250. On Monday of this week, only 157 Runes were engraved, a decrease of 99% compared to the peak period.
The total transaction fees accumulated from the engravings on May 13 amounted to $3,835, much lower than the hundreds of thousands of dollars in April. Since the launch of the Runes protocol 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 Trading Activity for Runes Tokens
After the launch of the Runes protocol, a standardized homogenous token for Bitcoin, on April 20, it quickly gained dominance in Bitcoin blockchain activities and even led to an increase in transaction fees. However, less than a month since its release, the demand has gradually declined, leading many to wonder if Runes was just a flash in the pan. Despite this skepticism, many experts still point out the protocol’s potential for future growth.
As a new standardized token for Bitcoin, Runes offers a simpler and more efficient system compared to BRC-20, addressing the issues of slow and expensive transactions on the Bitcoin blockchain.
According to data from the tracking platform Sat Screener, in the past seven days, six of the top ten Runes tokens have experienced a decline in trading volume, ranging from 20% to 57%. The number of engraved Runes has also been decreasing since early May, from several thousand engravings per day to just a few hundred.
Web3 collector “Mo” expressed in an interview with X that Runes currently lacks substantial applications, making it an unknown territory with immense potential. “I think people had too high expectations for the Runes market initially, which has led to the dry spell we are seeing now. But we need to be patient, and I believe Runes has the potential for continued development.”
Promising Future for Runes
Runes, along with Ordinals, which has seen increasing trading volume over the past year, are protocols introduced by Bitcoin developer Casey Rodarmor. Some believe that Runes might follow the maturity curve of the Ordinals protocol, where enthusiasm initially cools off but is followed by a surge 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 about an unprecedented revolution and often referred to as “Bitcoin’s second phase.”
Yoonsup Choi, Senior Business Development Manager at the NFT trading market Magic Eden, shared with Decrypt that the recent decline in the market was expected. However, Choi remains confident in the homogenous token market on Bitcoin.
He added that unlike meme coins in the past, Runes has more transparency as a protocol, with detailed provisions for the team’s pre-minted token ratio and minting standards.
Furthermore, experts point out that once Runes becomes more mature, offering convenient, fast, low-cost, and secure transactions, combined with the ability to bridge with the second layer network of Bitcoin, expanding liquidity and usage, the future of Runes is still promising.
BRC-20 Protocol: A standardized homogenous token issued through the Ordinals protocol, allowing developers to store special text files and information on the Bitcoin network.
While Runes may be going through a cooling-off period, it is still too early to determine if it will be a fleeting trend. As the community becomes more familiar with Runes applications and the ecosystem matures, there is a high possibility of reigniting interest in them.
Sources:
Decrypt, Cointelegraph Magazine