Updated May 15, 2024: Runes Protocol Witnesses a 99% Decline in Engraved Quantity!
The Rune protocol in the Bitcoin ecosystem is experiencing a massive decline in the quantity of engraved Runes. In late April, an average of 14,700 Runes were engraved daily, but in the past six days, that number has dropped to below 250. On Monday of this week, only 157 Runes were engraved, representing a 99% decrease compared to the peak period.
On May 13th, the total transaction fees accumulated from engraving Runes amounted to $3,835, significantly lower than the hundreds of thousands of dollars recorded in April. Since the launch of the Runes protocol on April 20th, 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 Article: May 8, 2024
Declining Enthusiasm for Rune Token Trading
Following its launch on April 20th, the Rune standard protocol for Bitcoin homogenized tokens quickly gained dominance in Bitcoin blockchain activities, causing transaction fees to soar. However, less than a month after its introduction, demand has gradually decreased, leading many to question whether Runes was just a passing trend. Despite this skepticism, experts still point out the protocol’s potential.
As a new standard for Bitcoin homogenized tokens, Runes offers a simpler and more efficient system compared to BRC-20, addressing the slow and expensive transaction issues on the Bitcoin blockchain.
According to data from tracking platform Sat Screener, six out of the top ten Rune tokens have seen a decline in trading volume, ranging from 20% to 57%, in the past seven days. The quantity of engraved Runes has also been decreasing since early May, dropping from thousands per day to just a few hundred.
Web3 collector “Mo” expressed in X that Runes currently lacks substantial applications, making the Rune world an unknown territory with significant potential. “I think people’s initial expectations for the Runes market were too high, leading to the dry spell we’re seeing now. But we need to be patient, and I believe Runes has the potential for continued development.”
Promising Future for Runes
Both Runes and Ordinals, which have seen increasing trading volume in the past year, are protocols introduced by Bitcoin developer Casey Rodarmor. Some believe that Runes may follow the maturity curve of the Ordinals protocol, where enthusiasm cools off after the initial stage, only to see a subsequent 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 unprecedented revolution and often referred to as the “second phase of Bitcoin.”
Yoonsup Choi, Senior Business Development Manager at NFT trading marketplace Magic Eden, shared with Decrypt that while the market decline is expected, he remains confident in the Bitcoin homogenized token market.
He added that previous meme coin launches had often troubled investors due to internal team issues, such as team members or insiders having priority access to tokens, distributing tokens across multiple unknown wallets, or opaque fund usage. In contrast, Runes is more transparent as the protocol sets specific proportions of tokens that the team can mint in advance, along with detailed specifications for minting.
Furthermore, experts highlight that once Runes becomes more mature, offering convenient, fast, low-cost, and secure transactions, alongside potential integration with the Bitcoin second-layer network to enhance liquidity and utilization, the future development of Runes is still highly anticipated.
BRC-20 Protocol: A homogenized token standard issued through the Ordinals protocol, allowing developers to store special text files and information on the Bitcoin network.
While Runes is going through a cooling-off period, it is premature to judge whether it is just a passing trend during its early development stage. As the community becomes more familiar with the applications of Runes and the ecosystem matures, it is likely to reignite interest among the community.
Sources:
Decrypt, Cointelegraph Magazine