In-depth analysis of the Bitcoin inscription circuit

Abstract

The Bitcoin ecosystem’s inscription circuit is rapidly growing, and ORDI, which went live on Binance, has become the new engine driving this development. Meanwhile, the SegWit and Taproot upgrades provided strong support for Bitcoin’s programmability and scalability, fueling the rise of projects such as Ordinals, BRC-20, and Atomicals. These technological advancements have not only increased the transaction capacity and flexibility of the Bitcoin network, but have also created additional revenue streams for miners.

introduction

Binance’s launch on ORDI marks a new chapter in the Bitcoin ecosystem, triggering another boom on the Bitcoin circuit. From the craze of inscriptions to today’s technological innovation, the Bitcoin ecosystem continues to evolve, and its popularity and continuous increase in value have attracted widespread attention. But what is driving all of this?

technology

Before we explore this issue, we need an in-depth understanding of key technological advancements in the Bitcoin ecosystem.

Segregated Witness (SegWit) is a key upgrade to Bitcoin’s core protocol launched in 2017 to address Bitcoin’s scaling challenges and specific vulnerabilities. Its main goal is to promote the inclusion of more transactions by fixing transaction scalability issues and expanding the Bitcoin block size limit. SegWit introduced the concept of block weight, which replaced the traditional block size limit, so that a fully loaded block can hold about 2,700 transactions, which is a significant increase compared to the previous 1,650 transactions.

Additionally, SegWit brought a new coding method, Bech32, and two innovative script types.

The Taproot upgrade by the end of 2021 brought significant changes to the Bitcoin ecosystem, taking an important step in BTC’s programmability and scalability, and laying the foundation for the Bitcoin ecosystem to flourish in 2023.

Key elements of the Taproot upgrade include changing the way transactions are confirmed and introducing Schnorr’s signature algorithm. The introduction of Schnorr signatures has brought multiple benefits to the Bitcoin ecosystem, particularly providing better privacy protection in multi-signature wallets. By merging and coding all private keys, multi-signature transactions look no different from other transactions, effectively improving privacy. Furthermore, Schnorr signatures support batch confirmation, making transactions across the entire network more economical and fast.

In addition to that, the Taproot upgrade brought the potential to create smart contracts to the Bitcoin network. Although it may be more expensive and has limited functionality compared to platforms such as Ethereum, the ability to enable smart contract interaction on Bitcoin worth up to $700 billion has huge potential and may push smart contract technology into mainstream applications. This change opens up new possibilities for Bitcoin’s future development.

Miner benefits

In terms of miner interests, recent data suggests that the Bitcoin inscription market is experiencing an unprecedented boom with the rise of projects like Ordinals and Atomicals. According to Oklink Blockchain Masters, the revenue of Bitcoin miners has increased significantly in the past three months. In particular, in November, the share of on-chain fee contributions rose from 2.4% on August 19 to 23.46% on November 16. This increase was mainly due to the introduction of the Ordinals trading pair. This shows that the development of the Bitcoin inscription market has significantly increased the share of miners’ fee income. This ratio is expected to reach 50% by the time Bitcoin production is cut in April 2024.

Currently, since Bitcoin mining farms in the US are losing money most of the time, and the semiconductor industry is also facing process bottlenecks, the mining machine computing power competition is gradually easing. In this case, miners may turn their eyes to the Bitcoin inscription as a new source of revenue. For example, less than a year after the launch of Ordinals, more than 50,000 tokens have been issued on the market, and the number of mints and transactions is growing rapidly, which has greatly contributed to the increase in miner fee revenue.

The expansion of the Bitcoin inscription circuit has not only fueled the growth of miner earnings, but may also be a major driver for the development of the Bitcoin ecosystem. However, miners are more concerned about the increase in the number of transactions, not just the fluctuation in the price of the inscription.

The combination of all of these factors has fueled the rapid development of the Bitcoin inscription circuit. However, we must also recognize that this development is not simply a market boom, but represents a profound transformation and technological advancement in the Bitcoin ecosystem. As Bitcoin shows its strong potential in every aspect, we have reason to believe that the Bitcoin inscription circuit will be a key factor driving the entire cryptocurrency industry forward.

Ordinals & BRC20

Launched by developer Casey Rodarmor in December 2022, the Ordinals project benefited from Bitcoin’s SegWit and Taproot upgrades, which increased the flexibility and functionality of the Bitcoin script. The Ordinals project introduced unique serial numbers for each Satoshi (Satoshi) and tracked these serial numbers during transactions, enabling users to inscribe (inscribe) data on specific unspent transaction outputs (UTXO), such as images, text, audio, etc., to implement the concept of asset transfer. Ordinals was officially launched at the beginning of this year and quickly became a sensation in the Bitcoin ecosystem.

The launch of the Ordinals protocol complements the adoption of Taproot, which has prompted the encoding and writing of NFT data into Bitcoin blocks. The NFT image is permanently engraved into the BTC block. This method is more decentralized than ETH NFTs, and there is no need to rely on a third party to view and transfer the NFTs.

Ordinal number theory mainly focuses on the traceability of Bitcoin’s smallest unit, Satoshi. Through design rules, each Satoshi has a unique number. Based on ordinal number theory, on-chain data can be associated with Satoshi to form inscriptions. The inscriptions are stored in the Taproot script and are identified and displayed by off-chain index nodes. Although it is impossible to operate on the chain due to indexing restrictions, the expansion of inscription functionality depends on the development of ord, such as the father and son inscriptions and the curse inscription index. Inscriptions are similar to colored coins. They all store data in transactions for off-chain programs to index, but inscriptions are stored in the input taproot script, while colored coins are stored in the output.

The implementation of Ordinals relies entirely on Bitcoin’s basic functionality, and NFT transfers are also handled entirely by the Bitcoin network. Although Ordinals has limited potential for development due to its artistic attributes, it was quickly accepted by the Bitcoin fundamentalist community.

Initially, Ordinals was mainly used to create NFTs, but on March 8, 2023, anonymous developer Domo launched BRC-20 based on the Ordinals protocol. BRC-20 is a Bitcoin altcoin issuance protocol similar to ERC-20. It defines a JSON data package in a specific format and is engraved on the BTC chain through ordinals. BRC-20 deployers can decide the total amount and name of the tokens themselves, and follow a first-come, first-served basis. $ordi is Domo’s first BRC-20 token deployed.

BRC-20 was further developed on the basis of inscriptions to achieve homogenized tokens, and the coin minting and transfer process was written into the BRC-20 indexer. However, BRC-20 requires a third-party sequencer to record the ledger under the BTC chain, adding additional complexity and becoming a weak point in the system.

BRC-20 transfers are not carried out on the main BTC chain and require a two-step BTC transaction (collection first and then transfer), leading to a large number of spam transactions. As a result, while BRC-20 is highly regarded for its broad applicability and liquidity, it has been subject to controversy due to its lack of support from the BTC core community. Recently, some developers have begun to develop decentralized sequencers such as #Trac，但这仍然受限于整体框架，难以取得突破。 The Inscription-Based Virtual Machines and Rollup concepts proposed by Domo, the founder of BRC-20, at the Ordinals Summit indicate that BRC-20 may move in the direction of second-tier networking.

With the introduction of BRC-20, the scope of use of the Ordinals protocol expanded, but it also caused Casey’s discontent. Casey’s team even asked Binance to remove the association with Ordinals from the ORDI token introduction to draw the line. This shows that although Ordinals and BRC-20 are both driving the development of the BTC ecosystem, there are clear differences in community acceptance and direction of development.

Atomicals & ARC20

Atomicals is a project focused on optimizing Ordinals and BRC20, with a special focus on homogenizing tokens and solving the problem that BRC20 relies too much on centralized off-chain indexes. The project leverages and extends Bitcoin’s UTXO model, using each Satoshi (the smallest unit of Bitcoin) UTXO as a specific atomic token or digital object to create and manage complex digital objects and token systems (ARC20) on Bitcoin.

Key features of Atomicals include:

• Use Satoshi as the basic unit to represent the token.
• Allows digital objects to be created, transferred, and updated on Bitcoin.
• Provides a decentralized and culturally compatible tokenization approach.
• Use Proof of Work (POW) to increase the fairness and decentralization of the casting process.
• It aims to expand Bitcoin’s functionality and support a wider range of applications.

Atomicals has fundamentally rethought how to issue tokens on Bitcoin in a centralized, immutable, and fair manner. It uses Satoshi as the basic “atom,” and each Satoshi UTXO represents a token. When verifying Atomicals transactions, simply check the corresponding UTXO on the Bitcoin chain. The atomicity of ARC20 tokens is consistent with the atomicity of Bitcoin itself, and transfer calculations are handled entirely by the Bitcoin network.

Compared with BRC20, ARC20 transactions greatly reduce the demand for third-party sequencers and increase the degree of decentralization of the system. The composability of UTXO makes ARC20 tokens more programmable. Theoretically, the exchange of BTC and ARC20 only requires switching the input and output of UTXO.

Since the launch of the Atomicals Protocol in September, its first token, ATOM, was rapidly emptied. Compared with BRC-20, ATOM’s mining process is more technical and fair.

Atomicals are minted and distributed based on Bitcoin’s UTXO. 1 token is equal to 1 satoshi, which is more in line with the technical characteristics of Bitcoin fundamentalism. The agreement not only defines the ARC-20 token standard, but also covers other use cases.

The community highly respects the Atomicals protocol and sees it as a complete set of agreements. The ARC-20 token standard is minted and transferred based on Bitcoin’s UTXO, and each unit of ARC-20 token is always supported by 1 satoshi, that is, 1 Token = 1 satoshi. All ARC-20 token operations can be completed through the Bitcoin network without additional steps.

In the ARC20 minting process, Atomicals introduced Proof of Work (POW), where the minter must calculate the hash value of a specific prefix character before minting, which is a more decentralized fair distribution method. The Atomicals protocol provides Bitwork Mining’s prefix parameter settings for ARC-20, which allows participants to directly mine inscripts/NFTs. The ARC-20 token standard is faithful to Bitcoin’s fundamentalist principles, and the advent of related tools in the future will enhance its liquidity.

Overall, Atomicals compete with Ordinals and focus on the decentralized creation and management of homogenous tokens and digital objects. By extending Bitcoin’s UTXO model, Atomicals has achieved a token system that is more decentralized and more in line with Bitcoin culture. With its technical advantages and design in line with Bitcoin’s fundamentalism, the ARC-20 token standard is expected to receive support from the Bitcoin core community and bring wider application possibilities to the Bitcoin ecosystem.

Rune & PIPE

The RUNE protocol stems from Ordinals founder Casey Rodarmor’s understanding of the shortcomings of homogenized token solutions such as BRC20 and Taproot Assets on the existing Bitcoin network. Casey proposed the idea of a homogenized token protocol based on UTXO to address the limitations of these solutions.

Key features and design ideas of the RUNE agreement include:

• UTXO-based: The balance of runes is stored in UTXO, and each UTXO can hold any number of runes.
• Transaction and agreement information: The output of a specific script is considered part of the agreement information, which clearly defines how Runes are transferred and distributed.
• Flexibility: Runes’ transfer is achieved by explaining the data push in the transaction, providing users with great flexibility in allocation.
• Distribution mechanism: The second data push is considered a distribution transaction, allowing the creation of new Runes.
• Simplicity and decentralization: The Runes protocol strives for simplicity, does not rely on off-chain data or native tokens, and fully complies with Bitcoin’s UTXO model.
• Symbol allocation: Runes can be associated with symbols, but the agreement does not involve symbol backordering issues to maintain the simplicity of the overall design.

Although RUNE is currently only in the conceptual design phase, BennyTheDev has successfully implemented the PIPE Protocol based on the technical architecture proposed by Casey. The PIPE Protocol is a key component of the TRAC ecosystem, which also includes the BRC20 token $TRAC, Bitmap, and TAP Protocol, an ORDFI ecosystem protocol developed by BennytheDev specifically for BRC20. The latter enables BRC20 to implement DeFi functions such as token swaps (swaps).

BennyTheDev is an active Bitcoin community developer. He launched the BRC-20 helper LooksOrdinal in March, deployed TRAC tokens in May, released Tap Protocol positioned at ORDFi in August, and launched the Pipe protocol based on Runes ideas improved in October.

The Pipe protocol follows Casey’s RUNE protocol idea and uses UTXO-based technology to homogenize tokens. The release of the Pipe Protocol attracted the enthusiasm of the hype from BRC20 and quickly completed the first round of hype. Although RUNE’s acceptance in the Bitcoin community may face challenges, its legitimacy is still stronger than BRC20.

Overall, the emergence of the RUNE and PIPE protocols reflects the Bitcoin community’s continuous exploration and innovation of ways to implement homogenized tokens. Although these agreements are still in their early stages, they have shown potential and may bring more transaction fee revenue, developers, and users to the Bitcoin ecosystem.

Bitmap & BRC420

Bitmap.land is the first metaverse project in the Bitcoin ecosystem, based on ordinals theory (Ordinals theory) and bitmap theory (Bitmap theory).

• Ordinals theory (Ordinals theory) numbers the smallest unit of Bitcoin, “Satoshi” (Satoshi), and defines the scarcity of Satoshi. This can be graphically understood as each “Satoshi” being a numbered box, the scarcity of which is determined by production time, and can be used to load data.
• Bitmap theory (Bitmap theory) by Twitter user @blockamoto在2023年6月13日提出. This theory maps each transaction input in a Bitcoin block as a parcel (Parcel) to form a block or district (district). Due to differences in the size of the different transaction inputs, the mapped lot size is also different.

Bitmap.land buyers were influenced by Decentraland and The Sandbox and used the method of dividing land and drawing patterns on a map, similar to the land buying logic on these two platforms. Users write data to Satoshi through inscriptions to obtain ownership of specific Bitcoin blocks, similar to free minting.

On the Bitcoin blockchain, each block is divided into four parts to represent different halving cycles. Users can check the number and color of each block on the Bitmap.land website. Different colors represent different sales states.

Bitmap.land’s sale is closely related to ordinal number theory, similar to Decentraland and The Sandbox’s virtual land sale, which relies on ERC-721 standards. The ordinal number theory is similar to the principles of early dyed coins, but the two are different in the context of Bitcoin’s current narrative, consensus, ecology, and infrastructure. Although ordinal number theory isn’t as innovative as ERC-721, BRC-20’s approach is more primitive.

Bitmap theory adds a new explanation to the Bitcoin block, providing a topical, albeit lacking in utility. It changed the connection between Bitcoin and the metaverse, giving every block of the Bitcoin blockchain a new dimension and making it part of the metaverse by allowing users to own and record individual blocks.

The bitmap theory attracted the attention of the Ordinals community and sparked a boom in inscriptions. Any block on the Bitcoin blockchain can become part of the metaverse through a Bitmap, bringing new opportunities for creation and ownership to the community.

Bitmap.land blurs the boundaries between Bitcoin and the metaverse through bitmap theory, paving the way for ownership, creativity, and community development. As the inscription craze continues, it means huge potential for those seeking a place in the digital world.

The BRC-420 protocol, since November 13, 2023, has become one of the active token protocols in the Bitcoin ecosystem, with the total number of Ordinals inscriptions exceeding 40 million. Unlike traditional token protocols, BRC-420 focuses on the modularization of on-chain inscriptions, creating a new type of asset on Bitcoin. Its first token, commonly known as the “Blue Box,” has achieved significant market gains, growing from the initial $0.15 to $1,000, and developers have received significant on-chain royalty revenue in a short period of time.

The BRC-420 protocol is a Bitmap-based asset protocol that creates everything from small characters and pets to complete game scripts and virtual machines by combining multiple inscriptions into one complex asset. Due to their on-chain open source nature, these assets can be run or verified by any client, fully reflecting the “Client Agnostic” spirit of full-chain games. Although RCSV’s Bitmap Browser dominates the market, there are opportunities for other teams to develop clients to run BRC-420’s assets.

From a market perspective, Bitmap has more than 25,000 holder addresses, surpassing Sandbox and becoming the metaverse asset with the highest number of holders in the entire chain. This achievement is due to its fair launch mechanism and the collective efforts of more than 200 development teams around Bitmap. The market capitalization of BRC-420 has grown with the launch of the Bitmap browser and the protocol itself, and has now reached approximately $30 million.

RCSV, the project side of BRC-420, is actively promoting the Bitcoin ecosystem’s full-chain game plan. The plan emphasizes assets, gameplay, logic, and data across the entire chain, and aims to create a truly decentralized Bitcoin on-chain gaming ecosystem. For example, developers can use the “fighting module” on BRC-420 to quickly develop and publish new games, while only paying royalties through an agreement.

RCSV also proposed an expansion plan for the Bitcoin network to address the Bitcoin network’s capacity limitations when processing a large number of transactions. The solution aims to migrate assets from tier 1 to tier 2 and implement a complete virtual machine environment at the next layer of the Module. The purpose of this arrangement is to guarantee security to the greatest extent while providing a low fee and efficient interaction environment for Bitcoin’s first-tier assets.

Overall, the BRC-420 protocol and associated Bitmap projects are inspiring innovation and vitality in the Bitcoin ecosystem. By creating complex, modular digital assets, BRC-420 is providing creators, developers, and users with new economic opportunities and interactive experiences. With the continuous efforts of the RCSV team, the Bitcoin ecosystem’s full-chain gaming and metaverse concepts are gradually becoming a reality, showing the broad prospects of Bitcoin technology and applications.

BRC100

BRC-100 is an extension protocol based on Ordinals theory, designed to implement various decentralized applications on Bitcoin Layer 1. This agreement not only undertakes BRC-20’s basic functions on Bitcoin, such as creation, minting, and trading, but also introduces the concept of decentralized computing. This means that based on the BRC-100 protocol stack, it is possible to develop various decentralized applications such as DeFi, SocialFi, and GameFi, bringing true decentralized, trustless, censorship-resistant and permissionless application scenarios to the first layer of Bitcoin.

One of the major features of the BRC-100 protocol is its interoperability, which not only allows all protocols and applications within its protocol stack to be compatible with each other, but also supports interaction with BTC, BRC-20, or other layer 1 chains such as Ethereum and Stacks. Additionally, the protocol introduced a UTXO model and a state machine model, enhancing its security and computational capabilities.

The protocol also includes a range of innovative features, such as inheritance concepts, application nesting, address and application state, permission settings, and decentralized governance. For example, the inheritance concept introduced by BRC-100 allows protocols to directly or indirectly inherit the characteristics of BRC-100. At the application level, applications deployed based on BRC-100 and its extended protocols can be nested to form sub-applications. At the same time, the protocol also introduced two roles: owner and administrator, providing a foundation for decentralized governance of applications.

The utility of BRC-100 is reflected in its diverse application cases, from the governance protocol BRC-101 to the automated liquidity protocol BRC-102, as well as functions such as staking, airdrop, lending, and stablecoin pools. These extended protocols make BRC-100 not only limited to token transactions, but also support more complex financial operations and calculations.

Overall, the BRC-100 protocol has opened up a new field of decentralized applications on the Bitcoin chain through its innovative features and powerful computing power. It not only inherits the advantages of BRC-20, but also provides a framework for open protocols, providing new possibilities for the future development of the Bitcoin ecosystem.

Taproot Assets & Nostr Assets

Taproot Assets is a protocol launched by the famous Lightning Labs to create and trade various digital assets on the Bitcoin network and integrate with the Lightning Network. The Lightning Network has been widely recognized by the Bitcoin community as a mature Bitcoin derivative protocol. The update to Taproot Assets expands the functionality of the Lightning Network from a simple peer-to-peer transaction payment channel to a peer-to-peer model that enables asset distribution and circulation. The feature of Taproot Assets is that token information is recorded as registration in the UTXO output script of the Bitcoin main network, and functions such as transfer transactions are implemented in the Lightning Channel. The biggest difference from BRC20 and ARC20 is that Taproot Assets are distributed by a single owner pre-minted and then distributed, rather than freely minted.

Taproot Assets has the support of Lightning Labs and Twitter founder Jack Dorsey, who has a significant funding background, making it superior to other grassroots projects in terms of formality and community support.

NostrAssets is an open source protocol introducing Taproot assets and Satoshis (Bitcoin unit) to the Nostr ecosystem. Users can use Nostr’s public and private keys to send and receive assets at the Nostr protocol layer. Settlement and security of assets depend on the Lightning Network, and the Nostr Asset Agreement itself does not issue assets; it simply introduces assets into Nostr through an agreement.

NostrAssets features include seamlessly integrating Taproot assets and Bitcoin into the Nostr ecosystem, providing developers with tools to create innovative products, enriching the value of Bitcoin and the Lightning Network ecosystem, and enabling a seamless experience from chat to transaction. In the future, NostrAssets plans to import Taproot assets from other Daemon universes to allow receiving and sending Taproot assets in and out of Nostr.

NostrAssets’ vision is to drive users into the Bitcoin ecosystem and deliver Taproot assets to users around the world. By providing modular development tools, NostrAssets aims to facilitate the construction of decentralized applications, thereby providing both user friendliness and commercial utility.

Nostr Assets also announced the imminent launch of the Fair Mint feature and is seeking collaborations with project parties interested in issuing assets on Twitter. This means that once the feature goes live, a large number of new assets are expected to appear on the protocol, which may attract widespread community attention and participation. This series of activities shows that Nostr Assets is actively expanding its ecosystem and preparing for future developments.

Ethereum inscriptions

Ethical is a protocol that replaces smart contracts and L2, which allows users to share information and perform calculations on Ethereum L1 at a low cost. It enables decentralized computing by applying rules to Ethereum call data to bypass smart contract storage and execution. In August 2023, Ethical introduced a virtual machine (ESC VM) to enhance its functionality and make it a general-purpose computing engine.

The founders of Ethnicity are Middlemarch (domo similar to BRC20) and Michael Hirsch. Its first protocol token is $eths. As the current leading token, it has brought significant returns to investors. Although this record falls short of the $ORDI and $SATS of the BRC20 circuit, it has shown a significant increase compared to other inscribed tracks.

In addition to $eths, Ethnic Track has other notable projects, such as Facetswap. Facet is a decentralized trading platform developed by Middlemarch and Michael Hirsch, initially called dumbswap and later renamed Facetswap. Although $Facet’s price and market cap temporarily lags behind $eths, its potential value may become more apparent after the mainnet goes live.

iERC20 is a new Ethereum-based token protocol that provides a low-cost token ecosystem that allows anyone to deploy, mint, and trade tokens on it. $Ethi, the first token in the iERC20 ecosystem, is officially supported. This protocol not only provides more options for Ethereum users, but also promotes the development of the inscription ecosystem on the Ethereum chain.

In the latest cryptocurrency development, iERC20 Protocol announced a partnership with Sparkle, a GameFi project incubated by Binance, to introduce Inscription NFTs and other inscription assets on iERC20, with the aim of using the advantages of inscriptions to enhance gameplay in the GameFi ecosystem. The collaboration drew a lot of attention in the Ethereum community, particularly shifting the focus from ETHS to the iERC20 protocol.

The iERC20 protocol is unique in that it not only develops the Swap function, but also integrates EVM cross-chain functionality, building a bridge between the Ethereum inscription and traditional Layer 2. This characteristic enables the protocol to introduce more mainstream coins and stablecoins, thereby expanding the TVL of the inscription ecosystem and providing more development possibilities for the entire system.

Additionally, the iERC20 protocol also plans to introduce PoW’s fair mining model and partner with other projects to launch a new inscription similar to the Atom protocol’s mining method. This strategy is expected to bring new impetus to the development of the Ethereum ecosystem.

Although $Ethi and $ETHS were launched almost at the same time, due to their low profile in the early stages, $Ethy did not initially gain fame as quickly as $ETHS. However, as the price of $ETHS increased and market attention increased, $Ethi also began to receive more and more attention. $Ethy’s detachable technology makes it more attractive to retail investors. Although its current market capitalization is still below $ETHS, its potential for growth cannot be ignored.

In the iERC20 ecosystem, $Ethi is seen as an important tool, similar to a shovel, providing special powers to the holder. For example, users holding $Ethi may receive an airdrop of inscriptions on collaborative projects, such as a recent collaboration with Sparkle. Furthermore, FOMO sentiment in the community is spreading, and many investors are optimistic about $Ethi’s future development potential, believing that it is the leading coin officially recognized by iERC20, and will increase in value as the PoW mechanism is launched and the inscription ecosystem continues to grow.

Overall, the ERC20 track is showing great potential and is likely to do more miracles after the BRC20. As more high-quality projects are added and the ecosystem develops, this field is expected to attract more users and innovations.

Other public chain inscriptions

As the wealth effect generated by the Bitcoin inscription spread to other public chains, various “RC 20” tokens began to generate a FOMO phenomenon, including DOGE inscriptions, BSC inscriptions, Litecoin inscriptions, BASE inscriptions, Polygon inscriptions, Solana inscriptions, etc.

In particular, on November 16, the Polygon network’s gas fees rose sharply, up to 1,800 gwei, as the community discovered POLS, the PRC-20 standard token deployed in May of this year. According to evm.link, the total circulation of POLS is 21 million copies.

Inspired by missing out on the Bitcoin inscription token SATS, community members began to “play a few defenses.” Compared to the high cost of BRC and ERC, POLS, which is easy to operate and low cost, quickly gained attention in the community. Users can mint POLS by visiting evm.link and paying less than 0.05 Matic.

The community also shared how to batch mint POLS through the batch collection function (which requires importing the wallet’s private key) or a script. Polygon’s low gas fees are considered one of the strengths of POLS as an inscribed token. If 21 million POLS were completely minted, Polygon could become the chain with the highest number of inscriptions on any EVM chain, including Ethereum. This is naturally reminiscent of the BRC inscribed token SATS, which attracted a lot of attention from the community due to its significant rise.

Future opportunities

In March 2023, Galaxy Research and Mining predicted that by 2025, the market value of the Ordinals market would reach 5 billion US dollars. At that time, the number of inscriptions was only 260,000, but now the number of inscriptions has reached 33 million, an increase of 126 times in just half a year. The market value of Longyi ORDI has also reached 400 million US dollars, and the market value of Longji SATS is already 300 million US dollars. It can be seen from this that the predictions for the entire inscription market are still far underestimated.

There are many different protocols on the inscription circuit. Of course, miners benefit the most. According to Tokenview’s on-chain data monitoring, the Bitcoin network’s daily transaction fee reached 11.6 million US dollars, surpassing Ethereum for the first time since 2020. As Bitcoin is about to be cut in half, miners urgently need to find revenue supplements. While the prosperity of the inscribed circuit benefits miners, it is also maintaining the security of the Bitcoin network in disguise.

The reduction in block incentives will also make miners increasingly rely on transaction fee revenue to pay operating costs. In the long run, Bitcoin will definitely compete for various expansion plans in the future. The explosion of this round of inscriptions and the resulting high transaction fees are a catalyst for moving towards this future. Currently, BRC20’s trading activity is mainly focused on OKX and Unisat. With the emergence of other types of agreements, different trading markets have emerged for different agreements, such as the Atomicals Market for ARC20. In the end, a leading agreement will surely give birth to a unique trading market, and the competition in the trading market is far from over. The wallet market is similar. Currently, the main wallet for BRC20 is Unisat, but there are still different wallets on the market that have launched and connected to different inscription protocols.

As money continued to pour into the inscription market, users were no longer satisfied with the meme hype and began to turn their eyes to inscription-based apps. The BRC420 mentioned in this article is a typical example. Unisat also brought innovation to BRC20. Through BRC20-swap, users can easily exchange BRC20 tokens like AMM DEX. As the first product to improve the liquidity of the Ordinals ecosystem, it is expected to unleash the potential of the Bitcoin DeFi ecosystem, and more features such as lending and derivatives may appear in the future. Recently, Unisat has also opened an API interface, which is very friendly to small developers. It can call many functions, such as automatic batch scanning, monitoring inscriptions, and automatic minting, which can generate many tool projects.

ORC20 returned on November 20, releasing the Nirvana upgrade, improving the inscription format to support BTC DeFi integration, introducing stablecoin support, providing services to issuers such as USDT and USDC, and more. Compared to BRC20, ORC20 is obviously more complex, can change the initial supply and maximum minting volume, and the naming is no longer limited by four-character words. However, it is also viewed as more centralized by the community, and upgradability is also viewed by the community as contrary to the immutable spirit of blockchain, fearing problems such as malicious additions and mouse storage by the project party.

Overall, BRC20 has the strongest community consensus because it is the most original protocol that went to the exchange first, and the fair launch also left a great impression on users. With the launch of ORDI on Binance, it also means that all exchanges are beginning to acknowledge and support the innovation of the inscription circuit. Since the technology that supports BRC20 deposits and withdrawals and self-built indexes is not too difficult, it is expected that the BRC20 token will still be prioritized in the future. However, the BRC20 token cannot always be a meme. The project party can choose an existing BRC20 token with community consensus as a utility token, which not only avoids regulatory risks, but also gains a ready-made community.

Summary and outlook

The development of the inscription circuit has shown remarkable vitality and innovation. The growth of this track has mainly benefited from Bitcoin’s key technological advancements such as SegWit, Bech32 coding, Taproot upgrades, and Schnorr signatures. These technologies not only improved the transaction efficiency and scalability of the Bitcoin network, but also increased its programmability. With the application of these technologies, the inscription market experienced a rapid boom, which not only attracted investors and users, but also promoted the development of diverse projects and agreements, such as Ordinals, BRC20, and Atomicals.

The growth of this track has also had a positive impact on the interests of miners. Miners’ revenue streams have expanded with the rise of projects like Ordinals and Atomicals, showing the importance of the inscription circuit to the Bitcoin network. In addition, inscribed tracks have also begun to appear on other public chains, showing their broad potential and influence.

Looking forward to the future, the inscription circuit is expected to continue to witness technological innovation and promote the implementation of more complex functions. The market growth is expected to continue, bringing more opportunities for investment and participation. At the same time, it is foreseeable that more innovative projects and agreements will emerge, further enriching the inscription ecosystem of Bitcoin and other public chains. Miner earnings are also likely to continue to grow as inscribed racetracks provide new revenue opportunities.

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