Inscriptions & Ordinals

Almost every major smart contract platform has seen an unintentional stress test lately as users experimented with a new type of token standard, called an Inscription, which has already been done hundreds of millions of times over the past week. Originally created on Bitcoin, these tokens are significantly cheaper than standard ERC-20 tokens, but come with many other tradeoffs. In this article, we’ll explore the history of inscriptions, their pros and cons, and determine whether or not they’re here to stay.

Early in 2023, the Ordinal Theory concept was released. Basically, it had the idea to number satoshis, the smallest denomination of a Bitcoin representing one one-hundred-millionth of a coin, based on their order of minting. This has the consequence of making each satoshi also an NFT with an associated numbering. Though initially used to create Bitcoin-based NFTs called digital artifacts, it was expanded into creating fungible tokens by X user @domodata. By inscribing a satoshi in a specific format with code, it can be interpreted as a token creation or minting, and future actions can move or exchange the tokens. These tokens were called BRC-20s, after the popular ERC-20 token standard from Ethereum.

Later on, more and more developers joined the construction of inscriptions, expanding their focus beyond the Bitcoin ecosystem. Subsequently, various inscriptions protocols emerged, targeting ecosystems beyond Bitcoin. These include:

• Ethscriptions and iERC20, Ethereum inscription protocols (representing inscriptions as $eths and $Ethi, respectively)

• PRC-20, a Polygon network inscription protocol (representing inscriptions as POLS)

• SPL-20, a Solana network inscription protocol (representing inscriptions as sols)

• ASC-20, an Avalanche network inscription protocol (representing inscriptions as acst)

• BSC-20, a Binance Smart Chain (BSC) inscription protocol (representing inscriptions as bnbs)