Digital Minting Surge Strains Blockchain Networks, EVM Compatible Chains See Inscription Spike
Summary:
An intense surge in digital minting, polarizing everything from avatars to digital tokens, is straining several blockchain networks, leading to partial or full outages. Networks such as Arbitrum, Avalanche, Cronos, zkSync, and TON are among those experiencing strain. This trend is comparable to Bitcoin Ordinals, which allow data inscriptions directly on the blockchain. Despite debates around the lack of rationales for these actions, inscriptions on EVM compatible chains have spiked over recent days, with millions being spent on gas associated with these activities.
The current digital frenzy of minting everything from avatars to digital tokens has caused a strain on several blockchain networks in the last week. Arbirtrum, Avalanche, Cronos, zkSync, and TON, among others, have all experienced partial to total interruptions due to this minting activity, according to industry observers. The most recent network to show signs of pressure is the data network Celestia, as highlighted by researchers via a screenshot of its block explorer on Dec. 18. Evidence of bulk minting on the Celestia network has also been brought to light.
Arbitrum affirmed on Dec. 16, during a 78-minute downtime, that a constant surge of minting had interrupted the sequencer's proper transaction relaying. Ken Timsit, a Cronos developer, stated that their team had rolled out a network update to introduce dynamic transaction fees that change concurrently with transaction volume. They implemented this change to better handle traffic surges like those experienced recently, which were due to elevated minting demand.
The sudden interest in this activity draws parallels to Bitcoin Ordinals that permit the inscription of data such as text, videos, and images directly on the blockchain. It is now realized that this kind of inscriptions can also be performed on Ethereum and other EVM-based chains by writing data in transaction calldata. The modus operandi of this rush primarily consists of BRC-20 style tokens, hinged around collections like Bitcoin Frogs and new token names like BMBI, BEEG, GROK as noticed by the ordinals tracker Ord.io. Cryptocurrency researcher "cygaar" suggests this is due to the affordability of these operations relative to smart contract interactions.
Bitcoin developer Eric Wall postulated earlier that EVM inscriptions could be a route for retail to access low-cap cryptocurrency assets, given the regulations and restrictions around ICOs. He asserted that consuming gas/blockspace could be one of the last openly accessible retail distribution methods. He referred to inscriptions as "BRC-20 derivatives", highlighting the fact that anyone can participate in the issuance of a specific ticker from the get-go.
However, Michael Rinko, an analyst at the cryptocurrency research firm Delphi Digital, failed to see the rationale behind it, merely labeling it as the new trend and lacking any rationality.
Irrespective of these debates, inscriptions on EVM compatible chains have seen a significant increase in the past few days as reported by Cointelegraph on Dec. 18. Figures from Dune Analytics indicate over $6 million were spent on gas on inscriptions on Dec. 18, while a record $8.3 million was spent on Dec. 16.
Notably, Sandeep Nailwal, the founder of Polygon highlighted on Dec. 18 the shifting trend of minters opting for Polygon owing to its attractive gas fees.
Published At
12/19/2023 8:34:21 AM
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