Ordinal Inscriptions Craze Boosts Blockchain Transaction Fees Across Networks
Summary:
This article discusses the recent surge in network transaction fees across all blockchains caused by the ongoing fascination with Ordinals inscriptions, leading to a heightened demand for blockspace. This spike in fees has notably affected Ethereum Virtual Machine (EVM) chains and the Bitcoin network, putting a strain on users due to increased transaction costs. Bitcoin pioneer Adam Back emphasizes that this surge could drive layer-2 adoption and stimulate innovation, despite the challenges. High-earning collections, such as Bitcoin Frogs, exemplify the lucrative potential in this market.
Over the past weekend, a surge in transaction fees across all blockchain networks was recorded due to the ongoing obsession over Ordinals inscriptions, causing an increased demand for blockspace, which was not constrained to the Bitcoin network alone. A massive inflow was recorded over the weekend for inscriptions on Ethereum Virtual Machine (EVM) chains, resulting in a steep surge in gas spent on these activities. As reported by Dune Analytics, a record-breaking $8.3 million was spent on gas for inscriptions on December 16. The Avalanche network was at the forefront of gas expenditure that day, recording over $5.6 million, followed by Aribitrum One network, which recorded $2.1 million in gas expenditure.
Statistics from the most recent 24-hour duration indicate that 58% of gas spent on the Avalanche network was used on EVM inscriptions, while zkSync Era allocated 48% of its fees towards these tasks. Similarly, BNB Chain dedicated 73% of its transactions over the past 24 hours to inscriptions. The consequences were severe on the Arbitrum One network, with a loss in service that lasted for 78 minutes on December 15. Like Ordinals on the Bitcoin network, EVM inscriptions functions as data inscribed in transaction calls to generate unique on-chain non-fungible assets. In line with this, there was a significant increase in inscriptions on the Bitcoin network over the weekend, amplifying the demand for block space hence transaction fees. Mempool.space reports a queue of close to 280,000 unconfirmed transactions. The spike has also raised Bitcoin transaction fees to up to $37, rendering the network impractical for its regular users, which are primarily peers involved in digital money transactions.
Bitcoin innovator and cryptographer Adam Back noted that despite the challenges, the momentum behind Ordinals cannot be halted. He reinstated that the high fees are more likely to encourage the use of layer-2 and spur innovation. Furthermore, an expert on NFTs and Ordinals known as "Leonidas” highlighted that a single collection had generated more volume in the past 24-hour duration than combined volumes by CryptoPunks, BAYC, MAYC, Pudgy Penguins, Azuki, DeGods, Moonbirds, Doodles, and Meebits. The Bitcoin Frogs ordinals collection topped the list with a market capitalization of $182 million. As reported by Cryptoslam on Dec. 17, there had been a rise in secondary sales of the collection to $4.8 million.
Published At
12/18/2023 8:26:27 AM
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