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Token is temporarily Earlier this week, it reached a market capitalization of $1 billion, making it the first BRC-20 token to reach this milestone.
A slew of other BRC-20 tokens are following suit, all hoping to become the next memecoin. Today’s Corner. However, what is unusual is that since there is no native support for the tokens, these tokens created on Bitcoin as a workaround are now being expanded to other chains that support native tokens.
In Bitcoin, an inscription is where an individual satoshi, the smallest unit of Bitcoin, is linked to a piece of data, such as an NFT or an image on a token. This is done using a small amount of data storage space available at the time of transaction. Tokens created on Bitcoin in this way are called BRC-20 tokens, and each token is part of its own collection.
When brought to another chain, these token standards are given their own names, such as Polygon PoS’ PRC-20, but the core idea is the same. These tokens include Ethscriptions on Ethereum, Doginals on Dogecoin, and Solana Inscriptions on Solana.
According to the Dune Analytics dashboard created by Hildobby, an anonymous researcher at VC firm Dragonfly, blockchains Celo, Avalanche, and Fantom each saw more than 20 million inscriptions on the network, while Polygon PoS recorded more than 109 million inscriptions. There were a total of over 200 million inscriptions for thousands of tokens across 11 blockchains other than Bitcoin.
This is causing a significant surge in network activity on these chains. These blockchains are seeing a significant surge in the number of transactions taking place per day as users mint and transfer these tokens. For example, the number of transactions taking place per day on the Celo blockchain increased from 277,000 to 3.7 million per day on a 7-day moving average.
This activity also caught the eye of Tron founder Justin Sun. He posted on Ask for community feedback Describes Inscription support for Tron and enabling BRC-20 token generation on the network.
In addition to this, NFTs are also being launched on other blockchains that support native NFTs using the same approach. For example, Ethereum Punks reproduced the original CryptoPunk collection, but with an inscription.
Why does this happen?
During development, questions were raised as to why these tokens were spreading to other chains. There is no need to apply this workaround to these chains as they have their own support for token generation. Moreover, these tokens can be bad for the network because they aggressively expand the data requirements of the blockchain, making it more difficult to run nodes or validators on the network. This is why some Bitcoin developers are trying to remove the inscription.
Eric Wall, co-founder of Taproot Wizards, a collection of Bitcoin NFTs, believes these types of tokens are popular because they allow for broader participation in the token mining process. He said this is somewhat similar to the proof-of-work mining used in Bitcoin. This is a task that is no longer particularly accessible to the average person.
“To mint 100% of the coin supply of BRC-20, SLP-20 or (the Ethereum Virtual Machine) equivalent derivative, you would have to spam not just once or twice, but for days (or even days). Months!) Having a full block on one of these chains means we now have an issuance mechanism that is open to anyone. It is a bit similar to Proof-of-Work mining issuance. We can call this “wasted block space proof”. He said at
HedgeHog, a well-known cryptocurrency trader and co-founder of eGirl Capital, said speculation is likely to arise as these tokens are a new field with no historical price metrics or reference points. “I think it’s just the flavor of the month,” he said. “They’re taking off, but it’s all speculation.”
Another factor is that transactions using inscription-based tokens can be cheaper than using tokens built natively on the blockchain. This is because it is cheaper to move Ethereum’s native coin Ether (ETH) and its corresponding inscription-based tokens than to use tokens built natively on Ethereum, for example using smart contracts.
“Ethscriptions-based tokens are expanding to chains that support native tokens because they are more than 10 times cheaper and more decentralized than using smart contracts,” said Tom Lehman, founder of Ethscriptions, arguing that smart contracts are unnecessary and a waste of money. I did. .
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