Tokens associated with Bitcoin Layer 2 solutions have outperformed Bitcoin (BTC) since the blockchain’s recent mining reward halving event on April 20, 2024.
According to CoinGecko, following the event, STX, the native token of the Stacks network, surged nearly 20% to $2.87, while Bitcoin saw a modest 4.7% increase to $66,300. The token is currently trading at $66,300, up from its pre-halving price of $63,000.
Other Layer 2 tokens, like Elastos’ ELA and SatoshiVM’s SAVM, also rose by 11% and 5%, respectively.
Bitcoin’s halving, which occurs every four years, reduces the amount miners receive for creating new Bitcoin. This time, the reward dropped to 3.125 BTC from 6.25 BTC.
The surge in Layer 2 token prices coincides with a post-halving increase in transaction fees on the Bitcoin blockchain. The mean transaction fee spiked to nearly 0.0020 BTC, the highest since early 2018.
This increase is partly attributed to the launch of Runes, a protocol allowing users to mint tokens on the Bitcoin blockchain. Speculators rushed to mint tokens, driving up transaction activity and fees. The project’s launch saw a record-high 37.6 BTC fee attached to block 840,000, with 853 runes etched within an hour.
The surge in transaction fees suggests that miners could have a lucrative new revenue stream in the Runes era. Some experts, such as prominent Bitcoin developer Jimmy Song, expressed surprise at the unprecedented fee levels, indicating potential sustained profitability for miners.
However, others, including participants in a Tone Vays livestream, cautioned that the fee spike might be temporary. They suggested that fees could return to more typical levels as the novelty of the Runes protocol wears off and transaction activity stabilizes. These differing views highlight the uncertainty surrounding the long-term impact of the fee surge on miners’ revenue.
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