Eths and other inscriptions continue to see premiums, is Ethscriptions Summer approaching?

Author: Mia, Chaincatcher

On July 25, Middlemarch, the creator of the Ethscriptions protocol, announced on Twitter that Ethscriptions Marketplace V2 is officially launched, introducing a new protocol for the Ethereum subscription market, ESIP-2. Additionally, the marketplace has launched two collections: Pillars and mfpurrs.

With the official launch of V2, the liquidity of Ethscriptions has been activated, and the floor price of eths has surpassed $600. Just in June, the minting cost of eths was only $1, and the more than a hundredfold increase in just a month and a half has made Ethscriptions a hot topic of "Fomo" again. According to Dune data, the total number of Ethscriptions inscriptions has exceeded 1 million, and based on Etch market data, the total trading volume of eths has surpassed 800 ETH.

Moreover, recently, Middlemarch announced the official launch of the Ethereum inscription virtual machine, ESC VM, after testing on Goerli. With a series of significant moves and multiple favorable factors, Ethscriptions seems to be gradually replacing Ordinals as the latest topic of discussion. Will Ethscriptions follow in the footsteps of Ordinals and lead to an Ethscriptions Summer?

What is Ethscriptions?

At the end of June, Tom Lehman, co-founder and former CEO of the well-known American digital media company Genius.com (Twitter handle @Middlemarch), introduced a new protocol for inscribing images on Ethereum, known as Ethscriptions, which allows the creation and sharing of digital collectibles using calldata.

Ethscriptions sparked a frenzy in the inscription and NFT communities, with minting volumes exceeding 30,000 in less than 18 hours, making Ethscriptions a hot topic of discussion. However, due to the pioneering launch of Ordinals recursive inscriptions and the lack of sufficient liquidity support for the premium, Ethscriptions gradually faced neglect from inscription players after its launch. Later, as the progress of Ordinals on-chain slowed down, more user space was given to Ethscriptions, prompting people to seriously consider what Ethscriptions really is.

In Ethereum, calldata refers to a field in a transaction that contains the function signature and encoding logic required to call a specific function in a smart contract. Ethscriptions uses calldata in a new way to create art collectibles. Ethscriptions uses a unique reference identifier (URI) for the encoded data in Ethereum transactions and stores the data in calldata, which gives Ethscriptions the uniqueness of art collectibles. Ethscriptions allows non-financial and arbitrary data to be written to the Ethereum blockchain, as long as the file size does not exceed 96 kilobytes, users can inscribe any type of file, although currently, Ethscriptions only supports image inscriptions.

In fact, storing URIs in Ethereum calldata is not a new concept exclusive to Ethscriptions; there was an experiment as early as 2016 that involved this, leading to ongoing controversy. Many in the crypto community believe Ethscriptions is "going backward," reaping the benefits of Bitcoin inscription innovations.

Influenced by the inscription craze, Ethscriptions received more attention from users, leading to multiple outages during its launch week. The high demand also made Ethscriptions a target for hackers. Just a month after the protocol's launch, the Ethscriptions Marketplace was hacked, resulting in the loss of 202 Ethscriptions from 123 individual addresses. This attack raised questions about its security, and user interest partially receded.

The creator Middlemarch promptly responded, stating that Ethscriptions.com would restart the marketplace, officially launching Ethscriptions Marketplace V2 on July 25. Additionally, a new protocol for the Ethereum subscription market, ESIP-2, was introduced, ensuring product security while providing a pathway for security in other markets.

Ethscriptions also recently announced the launch of the Ethereum inscription virtual machine, ESC VM. Built on Ethscriptions, ESC VM will grant ETHS computational capabilities, and ETHS will be integrated into the "Dumb Contracts" contract system. ESC VM will also provide a similar environment to EVM for deploying and calling Dumb Contracts. Although the so-called "Dumb Contracts" do not belong to the traditional smart contract category, the combination of "Dumb Contracts" and the ESC VM creates an interactive environment similar to smart contracts for Ethscriptions, greatly optimizing its operability and making it more suitable for "smart contract player types." Furthermore, ESC VM can already implement basic DEX functions, paving the way for more possibilities in the future development and application of Ethscriptions.

How is Ethscriptions Different from ERC-721 NFTs?

We all know that the ERC-721 smart contract is an improvement over the ERC-20 standard. Unlike the ERC-20 token standard, each token based on the ERC-721 standard is unique and non-fungible, which is what we commonly refer to as non-fungible tokens (NFTs).

In addition to uniqueness, Ethscriptions differs from NFTs in two ways: due to the use of calldata for storage, Ethscriptions can be cheaper and more decentralized than NFTs, which store data using ERC-721 smart contracts while ensuring that "all valid Ethscriptions content is unique." Additionally, Ethscriptions does not contain any smart contract logic, making them more difficult to combine than traditional NFTs.

Ethscriptions uses calldata as a data storage method for exchanging image art and other content, making it an economical alternative for "JPEG" type image art compared to the high computational costs of running complex smart contracts on Ethereum. In Ethscriptions, images or other data only need to be converted to hexadecimal format and then placed in the calldata field of a 0 ETH transaction. Once the data is recorded on the blockchain, it effectively creates an "Ethscription" similar to an NFT, eliminating the costs associated with deploying smart contracts for traditional NFTs.

The protocol creator Middlemarch has also mentioned that Ethscriptions are similar to NFTs but 40 times cheaper. Ethscriptions provide a cost-effective alternative for Ethereum NFTs, stating, "Why do I believe Ethscriptions will surpass NFTs? Because NFTs are only suitable for the wealthy, while Ethscriptions are for everyone."

However, this viewpoint is not entirely objective. Since Ethscriptions are entirely on-chain operations, the minting costs will depend entirely on the image size. For some larger image projects, the costs may far exceed the expenses of deploying an ERC-721 smart contract, making the on-chain costs for some larger collections potentially less economical than the ERC-721 format.

But because Ethscriptions entirely utilize on-chain data, there is no need for smart contracts for authorization or permission from anyone. To some extent, the decentralization and security of Ethscriptions will far exceed that of NFTs.

In fact, compared to Ethscriptions being issued directly on-chain, most traditional NFT data is stored on relatively centralized platforms like AWS or IPFS. Project teams have dominance over the servers, and while it seems that they own the NFTs in their wallets, in reality, the NFTs only exist on AWS, and hackers can attack by manipulating the contracts. Ethscriptions, on the other hand, store all data entirely on the Ethereum chain, saving on gas fees while ensuring that the artwork completely belongs to you and cannot be tampered with.

How is Ethscriptions Different from Ordinals?

The creator of Ethscriptions has stated that Ethscriptions was inspired by "Ordinals Inscriptions." As inscriptions, both protocols share the commonality of storing all data on-chain to define assets.

The differences lie in that Ethscriptions operates on the Ethereum network, while Ordinals operates on the Bitcoin network; Ethscriptions creates inscriptions using transaction calldata on Ethereum, while Ordinals creates them by storing smart contract transaction data on the Bitcoin network. Ordinals has evolved to support the creation of all types of digital files, including text, video, music, or games, while Ethscriptions is still in its infancy, supporting only image files.

In fact, both Bitcoin's Ordinals and Ethereum's Ethscriptions share a common consensus: to expand the application of blockchain technology beyond purely financial transactions. Perhaps due to the precedent set by Ordinals, the Ethereum community has not rejected Ordinals as the early Bitcoin community did, criticizing it for violating BTC's function as a financial asset, but has instead adopted a more open attitude to embrace and explore this innovation.

After a series of development innovations and market operations, the Ordinals market has gradually shown signs of fatigue, with early profit-seeking speculative users turning to other trends. The new concept product Ethscriptions, also belonging to the category of inscriptions, has undoubtedly become the next "FOMO" opportunity for these users, gradually replacing Ordinals as the hot topic of discussion in most communities, with some Ordinals users beginning to shift their focus to Ethscriptions.

In response to this innovation in Ethereum inscriptions, Ethereum chain users have shown significant interest. Coupled with the simpler operations on the Ethereum chain and lower user entry barriers, this provides Ethscriptions with a unique foundation to attract external users. When Ethscriptions shows signs of rising, it is easier to gain substantial funding and favor. With Ordi as a reference, eths, as the first token issued by Ethscriptions, has also sparked a FOMO trend, soaring from $1 to $600, with a current market cap exceeding $12 million.

Ethscriptions Ecological Landscape

Currently, in addition to the official Ethscriptions Marketplace, Ethscriptions has received support from NFT markets like OpenSea and Emblem Vault, allowing users to package them into Ethereum's ERC-721 or ERC-1155 NFTs for trading on OpenSea using Emblem Vault's tools. Just last month, the so-called "largest trading market for Ethscriptions," ETCH Market, also emerged.

The layout of the ETCH Market page reveals a strong "Unisat" vibe. Currently, ETCH Market includes three main sections: "Tokens, Marketplace, Launchpad," and has integrated all domain names available on the market, along with most Ethscriptions collections, including Hyppocritez and mfpurrs. Additionally, it has launched two projects in the Launchpad: EtchMarket OG PASS and Eths Lab.

Undoubtedly, the launch of ETCH Market provides Ethscriptions players with a new platform for trading inscriptions while also bringing more liquidity to the Ethscriptions market. Official data shows that the total transaction volume on the platform has surpassed 800 ETH, and with the activation and innovation of the Ethscriptions market, ETCH Market may emulate Unisat and become the largest trading platform in the Ethscriptions ecosystem.

In addition to the trading market, the creators of Ethscriptions have also indicated that the content inscriptions will have more possibilities in the future, achieving most of the functionalities of the ETH chain. For example, the recently deployed Dumb Contracts on the Goerli test network have realized the main functions of creating tokens, creating liquidity pools, and exchanging tokens. Ethscriptions will also support more digital file formats, which will greatly stimulate the development of the Ethscriptions creator market. Furthermore, due to the low entry barrier of Ethscriptions, more creators will likely flood into the Ethscriptions ecosystem for development, injecting fresh blood into its market. In the future, there may even be a dedicated creator/developer community exclusive to the Ethscriptions ecosystem, contributing more to the development and improvement of Ethscriptions, making the ecosystem more vibrant.

Conclusion

With the heated discussions in the crypto community, the popularity of Ethscriptions has peaked again, with the number of inscriptions surpassing 1 million. The wave of inscriptions continues, all moving towards the goal of "decentralization."

Currently, the inscription track is still in its early stages, and the narrative of Ethscriptions still has enormous growth potential. It is likely to form its own ecosystem in the future, and with the simultaneous development of Ordinals and Ethscriptions, it is highly probable that speculative funds will take turns driving up both. So, will Ethscriptions be a fleeting moment or a new trend in decentralized development? We will wait and see.