April 19, 2024
Gold Rush Of Inscriptions Breaks Six Blockchains
Latest Cryptocurrency News

Gold Rush Of Inscriptions Breaks Six Blockchains

EVM inscriptions are causing a stir in the crypto world, with opinions divided on whether it’s a groundbreaking opportunity for retail traders or an overhyped trend that’s congesting blockchains. The rush to inscribe everything from profile pictures to meme coins has recently overwhelmed several blockchain networks, including Arbitrum, Avalanche, Cronos, zkSync, and The Open Network.

Celestia, a modular data availability network, also succumbed to the inscriptions frenzy, leading to partial or full outages. A screenshot of Celestia’s block explorer on Dec. 18 was shared by industry researchers, showcasing the strain on the network. Videos of mass minting on the Celestia network have circulated, adding to the challenges faced by these platforms.

Arbitrum acknowledged the issue on Dec. 16, confirming a 78-minute outage triggered by a sustained surge of inscriptions. Cronos took steps to address the problem by implementing a network update to activate dynamic transaction fees, adapting to changing transaction volumes, and better withstanding traffic spikes caused by high demand for inscriptions. The inscriptions trend involves utilizing Ethereum Virtual Machine (EVM)-based chains, such as Ethereum itself, to inscribe data on transaction call data.

“Bitcoin inscriptions are equivalent to writing on the smallest denomination of a currency bill (UTXO model). EVM inscriptions are the equivalent of the notes are remarks field on a payment app. Where you make a 0 transaction to yourself and write data in the notes field. (acc model)”

Crypto developer Shardul Mahadik highlighted that the recent surge has primarily involved BRC-20-type tokens, with themes like Bitcoin Frogs and various new token tickers such as BMBI, BEEG, and GROK.

Cygaar, a crypto researcher, suggested that users are engaging in token mint and transfer transactions with call data due to their cost-effectiveness. This method is being employed to replicate the success of ERC-20 tokens on other chains, with some users spamming tiny mints repeatedly to take advantage of lower minting costs compared to smart contract interactions.

Bitcoin developer Eric Wall theorized that EVM inscriptions could serve as a way for retail traders to access low-cap crypto assets, given the regulatory restrictions on initial coin offerings (ICOs). He described inscriptions as “BRC-20 derivatives,” emphasizing their potential role in providing open access to retail investors.

“Since anyone can participate in the issuance of a specific ticker (mining it by burning blockspace) from day one, it is one of the few last bastions where retail can get in at the ground floor in a not-yet-clearly-illegal fashion.”

However, Michael Rinko, an analyst at Delphi Digital, expressed skepticism, stating, “I kinda just see it as the new hot thing,” and adding, “There is zero rationality behind it.” On a cautionary note, blockchain sleuth ZachXBT warned about crypto influencers promoting questionable coins and highlighted the potential risks associated with such activities.

The surge in inscriptions on EVM-compatible chains is evident in the figures, with more than $6 million spent on gas for inscriptions on Dec. 18, and a record-breaking $8.3 million spent on Dec. 16, according to Dune Analytics. Despite the challenges faced by some networks, Polygon founder Sandeep Nailwal noted that minters were turning to Polygon due to its favorable gas fees on Dec. 18.

Image By WangXiNa

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