Author: Mia, Chaincatcher
On July 25th, Middlemarch, the creator of the Ethscriptions protocol, announced the official launch of Ethscriptions Marketplace V2 and the introduction of a new protocol ESIP-2 targeting the Ethereum subscription market. Additionally, the marketplace also launched two collections, Pillars and mfpurrs.
With the official launch of V2, liquidity for Ethscriptions was activated, causing the floor price of eths to exceed $600. Just in June, the minting cost for eths was only $1, making the over 100-fold increase in a month and a half a hot topic once again. According to Dune data, the total amount of Ethscriptions inscriptions has exceeded 1 million, and according to Etch market data, the total trading volume of eths has exceeded 800 ETH.
In addition, Middlemarch recently announced the official launch of the Ethereum Inscriptions Virtual Machine (ESC VM) after testing on Goerli. With a series of major moves, coupled with multiple favorable factors, Ethscriptions seems to be gradually replacing Ordinals as the latest hot topic. Will Ethscriptions lead the Ethscriptions Summer like Ordinals did?
What is Ethscriptions?
At the end of June, Tom Lehman, co-founder and former CEO of the well-known digital media company Genius.com (Twitter handle @Middlemarch), introduced a new protocol for creating and sharing digital collections on Ethereum, called Ethscriptions. This protocol allows the use of call data to create and share digital collections on Ethereum.
Ethscriptions caused a sensation in the inscription and NFT circles upon its release, with the minting volume exceeding 30,000 in less than 18 hours, making it a hot topic of discussion. However, due to the groundbreaking launch of Ordinals recursive inscriptions and the lack of sufficient liquidity support, Ethscriptions gradually fell out of favor with inscription players after its release. Subsequently, as progress on Ordinals slowed down, more user space was given to Ethscriptions, prompting people to seriously consider what Ethscriptions really is.
In Ethereum, call data refers to a field in a transaction that contains the function signature and encoding logic required to call a specific function in a smart contract. Ethscriptions uses call data in a new way to create art collections on Ethereum. Ethscriptions uniquely references the data encoded in Ethereum transactions using a Uniform Resource Identifier (URI) and stores the data in call data, giving Ethscriptions the uniqueness of art collections. Ethscriptions allows non-financial and arbitrary data to be written to the Ethereum blockchain, as long as the file size does not exceed 96 kilobytes. Users can inscribe any type of file, although currently Ethscriptions only supports image inscriptions.
In fact, storing URIs in Ethereum call data is not a new concept exclusive to Ethscriptions. An experiment involving this was already mentioned as early as 2016, leading to continuous controversy. Many members of the crypto community believe that Ethscriptions is "going backwards" and reaping the benefits of Bitcoin inscription innovation.
Influenced by the inscription craze, Ethscriptions' launch received more attention from users, leading to several shutdowns during the launch week. The high level of attention also made Ethscriptions a target for hackers. Just a month after the protocol was launched, the Ethscriptions Marketplace was attacked by hackers, resulting in the loss of 202 ethscriptions from 123 individual addresses. This attack also raised doubts about its security and led to a partial withdrawal of user interest.
Creator Middlemarch promptly responded by stating that Ethscriptions.com Marketplace would be relaunched and officially launched Ethscriptions Marketplace V2 on July 25th, along with the introduction of a new protocol ESIP-2 targeting the Ethereum subscription market, providing a secure path for other markets while ensuring product security.
Ethscriptions also recently announced the launch of the Ethereum Inscriptions Virtual Machine (ESC VM). Built on top of Ethscriptions, ESC VM will give ETHS computational capabilities and introduce ETHS into the "Dumb Contracts" contract system. ESC VM will also provide an environment similar to EVM for the deployment and invocation of Dumb Contracts. Although "Dumb Contracts" do not belong to the traditional category of smart contracts, the combination of "Dumb Contracts" and the ESC VM creates an interactive environment similar to smart contracts, greatly optimizing the operability of Ethscriptions and making it more suitable for "smart contract player types" of interactive gameplay. In addition, ESC VM can already implement basic DEX functionality, paving the way for more possibilities for the future development and use of Ethscriptions.
How is Ethscriptions different from ERC-721 NFTs?
We all know that the ERC-721 smart contract is an improvement on the ERC-20 standard. Unlike the ERC-20 token standard, each token based on the ERC-721 standard is unique and non-fungible, commonly known as a non-fungible token (NFT).
In addition to uniqueness, Ethscriptions differs from NFTs in two ways: due to its use of Calldata storage, Ethscriptions is cheaper and more decentralized compared to NFTs that use ERC-721 smart contract storage, while ensuring the uniqueness of all valid Ethscriptions content. Furthermore, Ethscriptions does not contain any smart contract logic, making them more difficult to combine than traditional NFTs.
Ethscriptions uses calldata to exchange data for images and other content, providing an economically viable alternative for "JPEG" type image art on Ethereum, compared to the high computational costs associated with running complex smart contracts. In Ethscriptions, images or other data only need to be converted to hexadecimal format and then placed in the calldata field of a 0 ETH transaction. Once the data is recorded on the blockchain, it effectively creates an "Ethscription" similar to an NFT, eliminating the cost of deploying traditional NFT smart contracts.
Middlemarch, the creator of the protocol, has also mentioned that Ethscriptions is similar to NFTs but 40 times cheaper. Ethscriptions provides a cost-effective alternative for Ethereum NFTs, making it accessible to everyone, unlike NFTs, which are only suitable for the wealthy.
However, this view is not entirely objective. Since Ethscriptions operates entirely on the blockchain, eliminating the need to deploy smart contracts, the cost of minting Ethscriptions will depend entirely on the size of the image. For some larger image projects, the cost may be much higher than deploying ERC-721 smart contracts, making on-chain costs potentially less cost-effective for some larger collections.
But because it completely uses Ethereum on-chain data and does not require authorization or permission from anyone using smart contracts, Ethscriptions' decentralization and security will be much greater than NFTs in a certain sense.
In fact, compared to Ethscriptions being issued directly on-chain, most traditional NFT data is stored on AWS or IPFS, which is relatively centralized. The project party has dominance over the server, and although it seems that you have ownership of the NFT in your wallet, in reality, the NFT only exists on AWS, and hackers can launch attacks by manipulating the contract. With Ethscriptions, all data is stored on the Ethereum chain from start to finish, saving a certain amount of gas, and the artwork will belong entirely to you and cannot be tampered with.
How is Ethscriptions different from Ordinals?
The creator of Ethscriptions once stated that Ethscriptions was inspired by "Ordinals Inscriptions." As inscriptions, the common point between the two protocols is that they both store all data on the chain to define assets.
The difference lies in the fact that Ethscriptions runs on the Ethereum network, while Ordinals runs on the Bitcoin network. Ethscriptions uses transaction call data to create inscriptions on Ethereum, while Ordinals uses smart contract transaction data stored on the Bitcoin network for creation. Ordinals has evolved to support the creation of all types of digital files, such as text, video, music, or games, while Ethscriptions is still in its infancy and only supports image files.
In fact, both Bitcoin's Ordinals and Ethereum's Ethscriptions share a common goal: to expand the application of blockchain technology beyond pure financial transactions. Perhaps because of the precedent set by Ordinals, the Ethereum community did not reject Ethscriptions as the initial Bitcoin community did with Ordinals, criticizing it for violating BTC's function as a financial asset, but instead adopted a more open attitude to accept and explore this innovation.
After a series of development innovations and market operations, the Ordinals market has gradually weakened, and early speculative users have turned to other trends. Similarly, the new concept product Ethscriptions, belonging to the inscription category, undoubtedly became the next "FOMO" opportunity for these users, gradually replacing Ordinals as the hot topic of most community discussions, with some Ordinals users shifting their focus to Ethscriptions.
In the face of this innovation in Ethereum inscriptions, Ethereum users are also quite receptive. The simplicity of operations on the Ethereum network and the low user threshold make Ethscriptions particularly attractive to external users. When Ethscriptions shows signs of an uptrend, it is easier to attract a large amount of capital and favor. With Ordinals as a reference, eths, the first token issued by Ethscriptions, also sparked a FOMO frenzy, soaring from $1 to $600, and its current market value has exceeded $12 million.
Ethscriptions Ecosystem
Currently, in addition to the official Ethscriptions Marketplace, Ethscriptions has received support from the NFT market OpenSea and Emblem Vault. Users can use Emblem Vault's tools to package Ethereum's ERC-721 or ERC-1155 NFTs for trading on OpenSea. Last month, ETCH Market, claiming to be the "largest trading market for Ethscriptions," also emerged.
The layout of the ETCH Market page exudes a strong "Unisat" vibe. Currently, ETCH Market includes three main sections: "Tokens, Marketplace, Launchpad," and has integrated most of the domains on the market, including most Ethscriptions collections such as Hyppocritez and mfpurrs. Additionally, it has launched two projects in the Launchpad section: EtchMarket OG PASS and Eths Lab.
Undoubtedly, the launch of ETCH Market provides Ethscriptions players with a new platform for trading inscriptions and also brings more liquidity to the Ethscriptions market expansion. Official data shows that the total trading volume on the platform has exceeded 800 ETH. With the activation and innovation of the Ethscriptions market, in the future, ETCH Market may follow in the footsteps of Unisat and become the largest trading platform in the Ethscriptions ecosystem.
In addition to the trading market, the creator of Ethscriptions has also stated that there will be more possibilities for the content inscribed in Ethscriptions in the future, realizing most of the functions of the ETH chain. For example, the Dumb Contracts deployed on the Goerli test network recently have achieved the main functions of creating tokens, creating liquidity pools, and exchanging tokens. Ethscriptions will also support more digital file formats, which will greatly stimulate the development of the Ethscriptions creator market. Additionally, due to the low threshold advantage of Ethscriptions, more creators will enter the Ethscriptions ecosystem for development, injecting more fresh blood into its market. In the future, there may also be a dedicated creator/developer community for the Ethscriptions ecosystem, making more contributions to the development and improvement of Ethscriptions, making the Ethscriptions ecosystem more vibrant.
Conclusion
With the hot discussion in the crypto community, the popularity of Ethscriptions has once again reached its peak. The inscription minting of Ethscriptions has exceeded the milestone of 1 million, and the wave of inscriptions is still continuing, all moving towards the goal of "decentralization."
Currently, the inscription track is still in its early stages, and the narrative of Ethscriptions still has tremendous growth potential. It is very likely to form its own exclusive ecosystem in the future. With the common development of Ordinals and Ethscriptions, there is a high probability of both being chased by speculative funds in turn. So, is Ethscriptions a flash in the pan or a new trend in decentralized development? We will wait and see.
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