(Bloomberg) -- The respite provided by the debut of memecoins on the Bitcoin blockchain that helped to soften the financial blow of a recent software update to crypto miners already appears to be fading. 

Just as the April 19 “halving” reduced the amount of tokens awarded to miners for validating transactions, network transaction fees jumped as users rushed to mint the speculative coins on Bitcoin for the first time. The process is enabled by the Rune protocol, through which people can create their own fungible tokens. Dune Analytics’ data shows that the total transactions in Runes dropped to around 45,700 on Monday from its peak at above 750,000 on April 23.

Runes are similar to the popular Shiba Inu tokens on the Ethereum blockchain. Supporters are betting that one day Runes can be used as a utility token for Bitcoin-based decentralized finance, a type of financial applications built on blockchains without any intermediaries. However, with the development of Bitcoin DeFi still early on, Runes so far have only proved to be popular for being tokens without any utility, or as everyone knows them for, memecoins. 

“Runes really kind of capitalize on two big themes right now, one is memecoins and one is innovation on Bitcoin,” said Brian Rudick, senior strategist at digital-asset investment firm GSR.

Since the protocol launch, Runes have generated 2,169 Bitcoin, or approximately $137 million, in fees, according to data compiled by Dune Analytics user cryptokoryo. The share of transactions related to Runes peaked on April 23, where it counted for 81% of all Bitcoin transactions. 

The Rune protocol is the brainchild of developer Casey Rodarmor, who also created another mechanism, Bitcoin Ordinals, that allows people to make nonfungible tokens on Bitcoin. Like Runes, the Ordinals frenzy also turned into revenue bonanza for Bitcoin miners, along with so-called BRC-20 tokens - an earlier version of fungible tokens on Bitcoin that is more costly than Runes. The increased revenue is especially valuable for Bitcoin miners, as a key metric indicates that Bitcoin mining’s profitability is dropping close to all-time lows.

“Miners are excited about more increased transactions on the Bitcoin blockchain,” said Dan Held, a general partner at Bitcoin venture firm Asymmetric. “Because, the Bitcoin block space is finite, so as transactions increase — whether they be Runes, BRC-20s or anything else — the only way to be included in the block as it becomes more crowded is to pay more in fees, which means miners get paid more.”

Shares of Marathon Digital Holding Inc. and Riot Platforms Inc., two of the largest publicly-traded miners, were both down around 3% on Monday. Bitcoin was marginally lower and traded near a one-week low of around $63,000.

Read: Memecoins Mania Sent Bitcoin Fees Soaring During the ‘Halving’

Some members in the Bitcoin community have argued that building different things, whether it’s Runes, Ordinals or BRC-20, would crowd out regular transactions with high fees, especially most of these tokens have no real utility. But not just Runes, many projects are now focusing on bringing DeFi to Bitcoin, in which Runes can eventually become the utility tokens to many DeFi projects, just like UNI tokens for decentralized exchange Uniswap.

The total value of cryptocurrencies sent to Ethereum blockchain stands at around $55 billion, according to tracker DefiLlama. The market value of DOG•GO•TO•THE•MOON, one of the most popular memecoins using Runes now, is at around $382 million, according to marketplace Magic Eden.

“For the most part, there’s been much, much more acceptance than there have ever been,” said Rudick. “The opportunity space is huge.”

--With assistance from Sidhartha Shukla.

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