{"id":26828,"date":"2023-12-19T07:05:32","date_gmt":"2023-12-19T07:05:32","guid":{"rendered":"https:\/\/nftandcrypto-news.com\/crypto\/why-a-gold-rush-for-inscriptions-has-broken-half-a-dozen-blockchains\/"},"modified":"2023-12-19T07:05:35","modified_gmt":"2023-12-19T07:05:35","slug":"why-a-gold-rush-for-inscriptions-has-broken-half-a-dozen-blockchains","status":"publish","type":"post","link":"https:\/\/nftandcrypto-news.com\/crypto\/why-a-gold-rush-for-inscriptions-has-broken-half-a-dozen-blockchains\/","title":{"rendered":"Why a gold rush for inscriptions has broken half a dozen blockchains"},"content":{"rendered":"
\n

The latest degen \u201cgold rush” to inscribe everything from profile pictures to memecoins has led to at least half a dozen blockchain networks cracking under pressure over the past week.<\/p>\n

The last few days have seen Arbirtrum, Avalanche, Cronos, zkSync, and TON all suffering partial or full outages recently due to inscriptions, with modular data availability network Celestia the latest to succumb, according to industry researchers who posted<\/a> a screenshot of its block explorer on Dec. 18.<\/p>\n

Videos have also been posted<\/a> of mass minting on the Celestia network. <\/p>\n

Screenshot from Celestia block explorer. Source: X\/@Dogetoshi<\/em><\/figcaption><\/figure>\n

\u201cThe team is actively investigating, but we can confirm that a sustained surge of inscriptions triggered the sequencer to stop relaying transactions properly,\u201d Arbitrum confirmed<\/a>\u00a0on Dec. 16 amid a 78-minute outage.<\/p>\n

Meanwhile, Cronos developer Ken Timsit reported<\/a> that the team implemented a network update to activate dynamic transaction fees that change with transaction volume.<\/p>\n

\u201cThe chain can now more effectively withstand traffic spikes like the one that took place this week, which was caused by high demand for inscriptions,\u201d he said. <\/p>\n

What is driving the gold rush?<\/h2>\n

Like Bitcoin Ordinals, which allows data such as text, images, and videos to be inscribed directly on-chain \u2014 people have now realized they can do the same thing on Ethereum and other EVM-based chains by inscribing data on transaction calldata. <\/p>\n

Crypto developer Shardul Mahadik explained<\/a>: <\/p>\n

\u201cBitcoin 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)\u201d<\/p><\/blockquote>\n

Over the last few days, most of these have been BRC-20-type tokens, themed after various collections such as Bitcoin Frogs and various new token tickers such as BMBI, BEEG, and GROK according to ordinals tracker Ord.io. <\/p>\n

Crypto researcher “cygaar” postulated that users are sending token mint and transfer transactions to themselves with call data because operations are cheap. <\/p>\n

They are being heavily used in an attempt to replicate ERC-20 successes on other chains, but much of the activity is the same users spamming small mints repeatedly due to the lower cost of minting compared to smart contract interactions. <\/p>\n

\n

Inscriptions have taken down multiple chains and caused huge gas spikes over the last couple of days.<\/p>\n

However, very few people actually understand what’s going on.<\/p>\n

Here’s a simple explanation of inscriptions – how they work and why they’re being spammed everywhere : pic.twitter.com\/IjQ6wuypRX<\/a><\/p>\n

\u2014 cygaar (@0xCygaar) December 18, 2023<\/a><\/p><\/blockquote>\n

Bitcoin developer Eric Wall theorized<\/a> earlier this month that EVM inscriptions could be seen as a way for retail to access low-cap crypto assets. <\/p>\n

ICOs have been regulated and restricted and many projects start with token sales limited to venture capital firms or accredited investors. <\/p>\n

\u201cBurning gas\/wasting blockspace is one of the last distribution mechanisms that exists with open access to retail,\u201d he said. He described inscriptions as \u201cBRC-20 derivatives,\u201d adding: <\/p>\n

\u201cSince *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.\u201d<\/p><\/blockquote>\n

However, Michael Rinko, an analyst at crypto research firm Delphi Digital, didn\u2019t see the logic behind it. \u201cI kinda just see it as the new hot thing,\u201d he told Bloomberg before adding, \u201cThere is zero rationality behind it.\u201d<\/p>\n

Related: <\/em><\/strong>Daily gas spent on EVM inscriptions surges to record high of $8M<\/em><\/strong><\/p>\n

Meanwhile, blockchain sleuth \u2018ZachXBT\u2019 warned<\/a> about crypto influencers shilling shitcoins in a Dec. 19 post on social media. <\/p>\n

\u201cThe market was trending up for weeks yet they still have to resort to this to trade profitably,\u201d he said before adding, \u201cThis is your warning so do not come crying to me if you get dumped on.\u201d<\/p>\n

\n

Take note of influencers who are shilling coins with a lower market cap or liquidity than their entire follower count.<\/p>\n

The market was trending up for weeks yet they still have to resort to this to trade profitably.<\/p>\n

This is your warning so do not come crying to me if you get\u2026 pic.twitter.com\/Z6n2wllM2w<\/a><\/p>\n

\u2014 ZachXBT (@zachxbt) December 18, 2023<\/a><\/p><\/blockquote>\n

As reported by Cointelegraph on Dec. 18, inscriptions on EVM (Ethereum Virtual Machine) compatible chains have surged over the past few days. <\/p>\n

According to Dune Analytics, more than $6 million was spent on gas on inscriptions on Dec. 18, and a record $8.3 million was spent on them on Dec. 16. <\/p>\n

Amount of gas spent on inscriptions across various chains. Source: Dune Analytics<\/em><\/figcaption><\/figure>\n

However, on Dec. 18, Polygon founder Sandeep Nailwal noted that minters were switching to Polygon due to its favorable gas fees. <\/p>\n

\n

Highest number of inscriptions on @0xPolygon<\/a> POS, 161m. <\/p>\n

More than 2X the amount of inscriptions on the second ranked chain for inscriptions.<\/p>\n

Fun part, afaik the gas fees still stayed under 10 cents, i heard horror stories that on somechains it went to as high as $400. Peak\u2026 pic.twitter.com\/RC91DaOGhx<\/a><\/p>\n

\u2014 Sandeep Nailwal | sandeep. polygon (@sandeepnailwal) December 18, 2023<\/a><\/p><\/blockquote>\n

Magazine: <\/em><\/strong>BlackRock revises BTC ETF filing, El Salvador\u2019s crypto citizenship trending, and more: Hodler\u2019s Digest, Dec. 10-16<\/em><\/strong><\/p>\n<\/div>\n