Inscriptions for NFT coming to Ethereum

Inscriptions are landing also on the Ethereum blockchain thanks to the launch of the “Ethscriptions” protocol, which allows users to mint NFTs at a lower cost and in a more decentralized manner than classic data storage on smart contracts.

The new protocol, which was inspired by Ordinals, is seen by the community as a great innovation, but at the same time already obsolete.

Let’s take a look at all the details together.

A new way to create NFTs on Ethereum: the “Ethscriptions” protocol

Following the success of Ordinals on Bitcoin’s blockchain, here come NFT inscriptions on Ethereum thanks to the “Ethscriptions” protocol.

The new protocol, launched on 17 June by Tom Lehman , co-founder and former CEO of Genius.com, allows users to inscribe images less than 96KB in size on the Ethereum network, creating digital artifacts similar to NFTs.

Lehman, also known as Middlemarch on Twitter, announced that soon the functionality of “Ethscription” will expand to allow the inscription of other file types.

The process is based primarily on the use of Ethereum’s “calldata,” or the data within a call to a smart contract.

The advantage, compared to classical storage solutions directly on smart contracts, is a lower cost in terms of gas fees and greater decentralization.

In just under 18 hours since the protocol was launched, about 30,000 ethscriptions have been registered, a number that prompted Lehman to call it “a real success.”

Many users expressed enthusiasm about an innovation that has attracted much interest among the community, while others did not like the fact that calldata has been utilized by Ethereum developers for several years already.

In addition, although no real smart contracts exist on Bitcoin yet, and Ordinalscriptions are a necessity for minting NFTs, there are better performing solutions using smart contracts on Ethereum.

Ethscriptions are therefore seen as already obsolete by one part of the community, while the other side claims the launch of the protocol as an alternative method for minting NFTs that will be a total game changer.

Many users have embraced the idea of inscriptions on Ethereum to such an extent that they have temporarily blocked the API interface of the Ethscriptions website because of such a large volume in terms of traffic.

Data from the first NFT collections on Ethereum minted with “Ethscriptions”

The Ethscriptions protocol immediately gained the attention of the web3 audience by recording a large amount of NFT minting on the Ethereum network.

Just as the advent of Ordinals triggered a mad rush to find the yet-to-be-inscribed element on the Bitcoin blockchain, the same occurred with Ethereum with users rushing to create their own unique digital artifact.

The first collection that has been created through this innovative process is that of the “Ethereum Punks” effectively recreating one of the most famous collections in NFT history, the “Crypto Punks.”

The floor price of the latest version of the Punks, being highly variable at this stage, ranges between 0.0099 and 0.015 ETH.

According to data from Blur, a decentralized marketplace for exchanging non-fungible tokens, the Ethscriptions phenomenon captured a volume of 77.57 ETH in the last day.

If we instead consider the number of exchanges as of Saturday, the day the protocol was launched, this figure comes to 195.19 ETH.

Most likely, given the frenzy seen on social media about this new fad, the trading volume will easily reach 1000 ETH in the coming days.

For now we can count 1237 owners of Ordinals-style digital artefacts on the Ethereum network, and an NFT supply of 3665 pieces.

It will be interesting to observe in the coming days whether more famous collections from the NFT world will be minted and whether this trend will continue for the next few months or die out in a few days.

In addition, after the first wave of inscriptions involving only image files, many expect to see more complex inscriptions.

For example, we may soon see experimentation with fungible tokens on the Ethereum network in the style of BRC-20, without the use of a smart contracts.

While conceptually this may be decidedly interesting, it does not represent progress for the Ethereum ecosystem, but only a step backward from the functionality that the blockchain, described by Vitalik as a “global computer for the world,” can offer.

Middlemarch is not of the same opinion, who, excited about the launch of his protocol that guarantees the global uniqueness of the content of all valid Ethscriptions, mentioned in a tweet:

“the protocol is skating to where the puck is going in an L2 world.”

How are inscriptions on Bitcoin progressing?

While Ethscriptions are starting to become popular in the world of NFTs on Ethereum, the universe of inscriptions on Bitcoin has already reached the height of its popularity.

Activity on the Ordinals protocol of data on individual satoshis continues apace, so much so that some 222,000 inscriptions were registered yesterday.

The number, while higher than the average for the first few days of June, still results in a decrease in interest in the protocol compared to May, where a high of 400,000 inscriptions were reached in a single day.

In any case, there are still many users who use Ordinals on a daily basis, either to mint NFT-like digital artefacts or to create fungible tokens via the BRC-20 standard. Primarily, inscriptions are performed with text files (90.3%), and png images (5.3%)

In total, 12.8 million inscriptions have been executed as of February, which have “gifted” miners tx fees of 1745 BTC, equivalent to $46.1 million.

Bitcoin’s mempool continues to have some minor difficulties in including transactions in blocks quickly given the pressure from users to the Ordinals protocol.

Right now for example there are about 300 thousand transactions waiting to be confirmed and added to a new block.

It is interesting to note that although inscriptions continue to swarm the Bitcoin ecosystem, the fees paid to miners are dropping quite a bit compared to the early days of May.

These now represent about 3% of total miner revenue: a figure still higher than in the July 2022 – February 2023 period, but down sharply from the top of 42% recorded on 8 May 2023.