The first use case of Inscriptions was Bitcoin’s Ordinals. They enable data to be directly inscribed on the chain. This includes text, images, videos, and more.
Bitcoin lacks support for smart contracts. So, it needed a creative solution for adding support for NFTs (Non-Fungible Tokens) and other tokens and subscriptions was the solution. However, users in other blockchains like Ethereum wanted to do the same. Let’s discover why this is not a good idea and what happened.
EVM Inscriptions: The Surge, The Spam, and The Gas Spikes
EVM Inscriptions, unlike Bitcoin Ordinals, operate by inscribing data in transaction “calldata”. Calldata refers to optional data sent in a transaction, often used for passing inputs to smart contracts and rollup data. It is read-only and cost-effective compared to storing data in the smart contract state.
📈The #Ordinals inscriptions drives a spike in network transaction fees across multiple #blockchains, not just #Bitcoin. #Ethereum Virtual Machine (#EVM) chains saw a surge in gas spent over the weekend.💰 #CryptoNews #CryptoMining pic.twitter.com/YnCjnL9zGM
— 1ATH.Studio (@1ATHStudio) December 18, 2023
Currently, the majority of EVM inscriptions revolve around BRC-20-type tokens. These tokens store their data in calldata. Notably, BRC-20 tokens deviate from the traditional ERC-20 tokens by having their logic entirely off-chain.
The key advantage of EVM Inscriptions lies in their on-chain nature. All ERC-20 transactions and NFT metadata are stored on-chain, ensuring accessibility for everyone. Furthermore, these operations are cost-effective since they involve sending calldata on-chain, which is considerably cheaper than executing smart contract logic.
More About EVM Inscriptions
EVM Inscriptions heavily rely on off-chain indexers, introducing a potential point of failure and requiring a uniform adherence to protocol rules. This origin from EVM blockchains is that they were designed to support on-chain smart contract logic. So, it raises concerns about increased fragmentation and reliance on indexers.
Ordinals and BRC-20s have ripped off-late. $ORDI market cap 2x in 14 days ($500m -> $1b).
Now, EVM-chains like Polygon, Avalanche, BNB are following suit with a massive rise in inscriptions.
Is this reasonable? I don't think so.
Inscriptions aren't needed on EVM chains that… pic.twitter.com/r0fL3rVWar
— Prithvir (@Prithvir12) December 12, 2023
So, the possible reason why are these EVM Inscriptions being spammed across various EVM chains is because people want to replicate the success of BRC-20 tokens on these chains. However, a significant portion of these transactions involves repetitive small mints from the same user or bot. The cost-effectiveness of Inscriptions, compared to smart contract transactions, has led to rampant spamming.
This spamming activity has had tangible consequences. Including the takedown of Arbitrum and a degraded user experience on other chains like zkSync and Avalanche. The longevity of this trend remains uncertain, and its persistence raises questions about the sustainability and impact of EVM Inscriptions on the broader blockchain ecosystem.
EVM is unusable. Completely broken by JPEG inscriptions.
$50 fees on Arbitrum. $500 fees on Avalanche.
De-facto liveness failures everywhere. https://t.co/1MHm7shV1M
— KEMOSABE (@KEMOS4BE) December 16, 2023
Conclusion
The recent surge in EVM Inscriptions has showcased both the potential and pitfalls of this innovative approach. While it offers cost-effective and on-chain solutions, the heavy reliance on off-chain indexers, lack of composability, and potential for spamming raise concerns about its long-term viability.
As the blockchain community navigates these challenges, the evolution of EVM Inscriptions will undoubtedly shape the future of decentralized applications and token ecosystems. Inspired on X.
Disclaimer
The information discussed by Altcoin Buzz is not financial advice. This is for educational, entertainment, and informational purposes only. Any information or strategies are thoughts and opinions relevant to the accepted levels of risk tolerance of the writer/reviewers and their risk tolerance may be different than yours. We are not responsible for any losses that you may incur as a result of any investments directly or indirectly related to the information provided. Bitcoin and other cryptocurrencies are high-risk investments so please do your due diligence. Copyright Altcoin Buzz Pte Ltd.
