Bitcoin transaction fees surged to record levels following the launch of a new standard for Bitcoin-based digital collectibles during UFC 300, reaching $78.3 million in transaction fee revenue on April 20. This marks a significant increase from March’s total transaction fees of $85.9 million. The average transaction fee skyrocketed to $91.89, a remarkable 2,645% surge from the previous month.

The surge in transaction fees was driven by activity related to a new token standard for Bitcoin-based digital collectibles called Runes. This protocol, developed by Bitcoin developer Casey Rodarmor, allows users to create fungible tokens using Bitcoin’s Opcodes. Runes users bid up transaction fees to mint tokens, creating a high-stakes bidding war for block space.

Despite the Bitcoin Halving, which typically reduces mining revenue by 50%, miners actually earned more revenue after the Halving thanks to the surge in transaction fees from Runes activity. Bitcoin’s hashprice peaked at $183/PH/day on April 20, a 74% increase from pre-Halving levels, providing miners with a significant revenue boost.

The Runes protocol introduces a new dimension of urgency into transactions, where users compete for block space and transaction ordering. This urgency creates a bidding war for Bitcoin’s limited blockspace, driving up transaction fees and providing miners with increased revenue opportunities.