Data from Etherscan reveals 95% of transaction activity on major Ethereum Virtual Machine (EVM) chains is currently dedicated to inscribing tokens.

Originally developed as a method to create token equivalents on Bitcoin, the Inscriptions process involves embedding data, such as text, images, videos, into each satoshi, the smallest denomination of BTC.

The trend gained momentum on Bitcoin in April 23 when Bitcoin's BRC-20 tokens, based on text inscriptions, gained popularity.

This concept was later adopted by Ethereum and other EVM chains.

Same But Different

In contrast to traditional token creation on Ethereum, Inscriptions occur within transaction input data rather than on a Wei, the smallest denomination of Ether.

This method proves to be more cost-effective for deploying, minting, and transferring tokens compared to using smart contracts.

Unlike smart contracts, which natively handle the indexing of transactions and application of token rules, Inscriptions rely on third parties to perform these functions.

This approach moves all computation off-chain, resulting in increased fragmentation and dependence on indexers.

Moreover, there is minimal composability with Inscriptions.

Surge in Inscriptions

Despite feeling a little counterintuitive, the phenomenon of Inscriptions has been on the rise across EVM chains since mid-November, contributing to a evident surge in daily transactions, a spike in gas fees, and prolonged transaction processing times for most major chains.