The Runes protocol, known for enabling the creation of fungible tokens on the Bitcoin blockchain, has experienced a significant decrease in activity since its initial week of trading. On May 10th, a noticeable decline in activity was observed, with fewer new mints and new wallets interacting with the protocol compared to previous periods.
According to data from Dune Analytics, the protocol's fee revenue has been steadily declining. While Runes still generates hundreds of thousands of dollars daily in fees on the Bitcoin blockchain, the total fees have only surpassed $1 million on two occasions within the past twelve days, indicating a notable downward trend. The launch of the Runes protocol occurred three weeks ago on April 19, coinciding with the most recent Bitcoin halving event. This debut sparked excitement among investors, leading to a surge in transaction fees and record-breaking earnings for Bitcoin miners, who generated over $135 million in fees during the first week alone.
However, Runes-related transactions, which initially dominated the Bitcoin network, have gradually dwindled since April 24. On April 23, Runes accounted for the majority of transactions, reaching 81.3% of the total, while Bitcoin transactions dropped to 18.15%, with Ordinals and BRC-20 transactions at 0.1% each.
Following this decline, Runes transactions continued to decrease until May 2. However, starting from May 3, Runes began to show signs of recovery. On May 4 and 5, Runes managed to regain a transaction share above 60%. The rise in transaction fees was initially welcomed by the mining community, compensating for their reduced earnings after the Bitcoin halving. However, total revenue for Bitcoin miners dropped to under $30 million per day in May.