Inscriptions are the metadata added or “inscribed” onto Bitcoin satoshis (sats), the smallest unit of the Bitcoin currency, which can include information attached to transactions. It was originally developed on Bitcoin Ordinals protocol under the name of BRC-20 but now appeared on many other blockchains such as Fantom and Polygon because mint and transaction fees on these blockchains are cheaper than on the Bitcoin blockchain.
According to data from Dune Analytics, tens of millions of Inscription tokens have been created on Polygon and BNB Chain, but users paid only about $1 million for each network.
On Avalanche, transaction fees for “Inscriptions” have skyrocketed to millions of USD per day, reaching a peak of $5.6 million on December 16, 2023. During the period from December 12 to December 17, the total fees users paid for this trend amounted to $13.8 million, accounting for 70% of the total transaction fees on Inscriptions on all blockchains.
Minting and moving NFT tokens related to Inscriptions also resulted in a significant increase in gas fees. The average transaction fee rallied to more than 500 gwei, some users even had to spend up to 5,000 gwei – the highest fee ever to validate transactions on Avalanche.
Besides Avalanche, Arbitrum users also saw a surge in transaction fees. About $3 million was spent by Arbitrum network users in the past three days on this activity, accounting for about 15% of fees on blockchains.
The return of the Ordinals began after Elon Musk shared about NFTs at a talk with The Joe Rogan Experience. It then exploded in early November 2023 on Polygon as a large number of users mint PRC-20 tokens, which were created using calldata on Polygon blockchain instead of ERC-20 token standard.
Although it is unclear what the driving force behind the boom of Inscriptions is, this trend is making miners and validators happy with increased income due to vibrant network activity.