In the past week, a surge in the practice of embedding various data types, such as profile pictures and meme coins, onto blockchain networks has led to the breakdown of at least six networks. Networks including Arbitrum, Avalanche, Cronos, zkSync, and The Open Network have all faced either partial or complete outages due to this new trend known as Inscription. Additionally, Celestia, a modular data availability network, has also encountered difficulties, with industry researchers highlighting these issues on December 18 through updated screenshots on its block explorer.
Videos capturing the extensive minting activity have circulated, particularly on the Celestia network. On December 16, Arbitrum confirmed a 78-minute outage, attributing it to the high volume of inscriptions that disrupted normal transaction processing. Cronos's developer Ken Timsit noted that the network has updated to include dynamic transaction fees that adjust according to transaction volume, aiming to better manage the recent traffic spikes driven by Inscription demand.
Inscription allows for embedding data such as text, images, and videos directly onto a blockchain, a concept initially popularized by Bitcoin's serial numbers. Now, Ethereum and other Ethereum Virtual Machine (EVM)-compatible chains are witnessing a similar trend. Shardul Mahadik, a cryptocurrency developer, compares Bitcoin inscription to writing on the smallest paper currency and EVM inscription to a memo field in a payment app, where zero-value transactions to oneself include written data.
Recently, BRC-20 type tokens have dominated these inscriptions, with series like Bitcoin Frog and new tokens like BMBI, BEEG, and GROK emerging, according to Ord.io data. Cryptocurrency researcher cygaar suggests that users are favoring coin minting and self-transactions due to low operational costs. Although initially intended to replicate ERC-20's success on other chains, much of the activity is repetitive spam from the same users, attracted by the low minting costs compared to smart contract interactions. Bitcoin developer Eric Wall views EVM inscriptions as a means for retail investors to access low-market-cap crypto assets, especially since initial coin offerings are highly regulated and often restricted to institutional investors.
Wall describes these inscriptions as a "BRC-20 derivative," highlighting their accessibility for retail investors from the start, despite potential legal ambiguities. Meanwhile, Michael Rinko from Delphi Digital views the trend as irrational, though currently popular. Additionally, blockchain investigator ZachXBT cautioned against promoting spam coins on social media on December 19. Inscriptions incurred costs over $6 million on December 18 and a record $8.3 million on December 16, as per Dune Analytics. However, Polygon founder Sandeep Nailwal noted a shift towards Polygon for minting due to its more affordable gas fees.
