Author/Weilin
Editor/Wendao
"The inscription of iotx at 1 am, the inscription of Tia at 2 am, the inscription of inj at 3 am, the inscription of op at 4 am…" This widely circulated post on social media succinctly captures the fervor of Web3 users for the inscription market.
Since December, the method of using blockchain networks such as Bitcoin to forge encrypted assets (homogeneous/non-homogeneous) known as inscriptions has exploded in popularity, leaving many Web3 enthusiasts "burnt out."
The frenzy can be traced back to the skyrocketing prices of the ORDI and SATS tokens after they were listed on centralized cryptocurrency exchanges, both of which are BRC-20 tokens in the Bitcoin inscription ecosystem.
The former surged from a low of $2-3 to a peak of $68, creating a market value of $1.3 billion; the latter became the hottest "zeroing game" of the year, with its price increasing from a fraction of a cent to $0.00000092, a furious 100-fold increase. Moreover, their initial prices generated on the Bitcoin network were much lower than when they were listed on the secondary market.
The "wealth myth" brought about by the skyrocketing prices in the secondary market has acted as a catalyst for Web3 players to "inscribe" tokens. Rumors on social media claim that a major holder who invested in ORDI and SATS six months ago has already made a quick $36 million.
Such stories never fail to stimulate the nerves of speculators and attract traffic. Anonymous project teams are also very sensitive, developing various inscription tokens for players to "inscribe." The generation of these tokens has caused network congestion and increased transaction fees on blockchain networks such as Bitcoin, Ethereum, Solana, Avalanche, and Injective, demonstrating the madness of the market.
On the other hand, the current "wealth effect" is not as strong as imagined, and even harbors hidden risks: in the P2P wallet trading area for BRC-20 tokens "inscribed" with inscriptions, there are more sell orders for new inscriptions than buy orders, and the liquidity of the secondary market is not strong; large exchanges that truly attract funds and traffic have not listed many new inscription tokens; the Injective inscription project INJS was "aborted" and refunded in less than 12 hours; there have also been cases of phishing websites, fraudulent inscription risks, and asset theft in the market.
The inscription market has given birth to various "unethical" chaos from its "unreasonable" growth.
Speculated "Wealth Myth"
"Profits of over $36 million, achieving a huge leap in wealth." This story comes from the analysis post of the cryptocurrency KOL @riyuexiaochu on the social platform X. On December 13, he observed from the changes in the on-chain address that an address holding 64 trillion SATS tokens "sold all of them for a profit after SATS was listed on Binance, worth $36 million, about 260 million RMB."
@riyuexiaochu also found that this address, which had previously collected nearly 1 million ORDI, sold them all on the Gate.io exchange on May 12, "when the price was $10-12, worth tens of millions of dollars. He bought them a few days after April 20, speculating profits of at least $5 million."
This tweet analyzing the on-chain data of SATS and ORDI sparked the attention of 144,000 people. Someone in the comments section revealed an account with a floating profit of 32.89 million SATS and added, "Thank you, I'm quitting the circle," with more calls for another BRC-20 token DOVI in his X; others called for 3518 "digital inscriptions" in the comments section.
More calls for inscriptions represented by letters and numbers flood the social boards of X and Binance, where various versions of "wealthy" inscription stories and experiences of getting up early and staying up late to inscribe tokens are also circulating.
The soaring prices of ORDI and SATS have provided support for these "myths" and the pursuit of action. Referred to as "inscription tokens," they each have their own stories, with the commonality being that they are both generated on the Bitcoin blockchain and their project teams are anonymous.
ORDI was born (inscription initiated) on March 8, 2023, created by the X user @domodata, who issued the "experimental BRC-20 token ORDI" using the Ordinals protocol, which assigns numbers to the smallest unit of Bitcoin, the satoshi (Sat).
This protocol was released on the Bitcoin mainnet in January 2023 by software engineer Casey Rodarmor, with the original intention of bringing NFTs to the Bitcoin network. However, after @domodata set the "additional information as a unified standard," the Ordinals protocol gained the ability similar to the Ethereum ERC-20 standard—anyone can issue homogeneous tokens. Most importantly, this was done on the Bitcoin network.
ORDI was thus born, with a circulation of 21 million, commemorating a piece of Bitcoin. Subsequently, ORDI gained a price in the wallet that inscribed it, initially only at $0.005. By May, ORDI began to appear on centralized cryptocurrency exchanges, where it surged to $17 upon listing, a 3400-fold increase. Even when it eventually fell back to the $2-3 range, the increase was still 300-500 times.
Even at this stage, the heat brought about by ORDI's inscription only spread within the circle of inscribers, where many other inscription tokens issued using the @domodata method were circulating, and then handed over to players who love to inscribe.
Within a month of ORDI's issuance, over 2,000 BRC-20 tokens were born, and SATS, which later became popular, was among them.
Today, there are over 58,000 types of BRC-20 tokens in the market of the Bitcoin inscription wallet UniSat, with an average of 6,500 new tokens born each month. The vast majority are created by anonymous individuals, and there are over 22,000 inscription tokens that have achieved 100% progress, but only 22 of them have over 5,000 holding addresses.
Top 20 BRC-20 tokens by number of holding addresses
Inscribing has also led to a surge in transaction fees on the Bitcoin network. On December 19, Dune Analytics data showed that the total fees generated by inscribing inscriptions on the Bitcoin Ordinals protocol reached 4282.5 BTC, equivalent to about $176 million.
The reason for the surge in BRC-20 tokens is still the price of ORDI. The climax occurred on November 7, when the world's largest cryptocurrency exchange, Binance, listed ORDI. Since then, the token has risen from around $5, reaching a peak of $69.8, a 1296% increase in less than a month, and a staggering 1,395,900% increase from its initial issuance price in March, surpassing Bitcoin's 10-year increase (62,325%).
SATS, which was issued just one day after ORDI, was also driven up. The story of this token is a tribute to Bitcoin's founder, Satoshi Nakamoto, with a circulation of 21 trillion, pushing inscription token creators into another "Meme coin zeroing game." From an early high of $0.0000000091, it surged to a historical high of $0.00000092, a 100-fold increase in six months.
While the old hands in the crypto circle are discussing the utility of inscriptions, users who inscribe tokens don't care about that. BRC-20 tokens have once again formed a unique market phenomenon in the cryptocurrency world: unreasonable growth.
The previous meme coin frenzy in the bull market was also sneered at by the old hands, but it also created coins that increased by thousands or even tens of thousands of times. Now, inscription tokens have become another fervent "casino" for betting big with small stakes.
Inscribed Inscriptions Are Not Easy to Sell
The current market value of SATS is $1.449 billion, surpassing the first inscription token ORDI's $1.087 billion, and holders of both sides are even arguing on social media about who is the "leader."
Some BRC-20 tokens have been listed on centralized trading markets, with RATS, BTCs, and others refreshing their market values with their own stories, also driving FOMO in the market. Stories of inscribing experiences continue to appear on social media.
For BRC-20 tokens that have not been listed on exchanges, they lie in the wallets of holders, who are waiting for a "rich listing"; there are even more tokens whose progress bars have not reached 100%, waiting for dreamers of financial freedom to "inscribe."
BRC-20 tokens awaiting "inscription" displayed on the UniSat webpage
At the same time, the number of wallets meeting the demand for "inscribing" tokens in the market is increasing. In addition to UniSat, the earliest and largest Bitcoin inscription plugin wallet, OKX Web3 wallet, Ordinals Wallet, Hiro Wallet, and Xverse have also started to support storage, sending/receiving, and transferring Bitcoin inscriptions and BRC-20 tokens, some even supporting inscription, i.e., "inscribing."
As a result, Bitcoin inscription tokens have formed a three-tier market: wallets and various inscription platforms constitute the primary market for "inscribing" tokens, where users need to spend BTC to inscribe; inscribed tokens can also be listed on some platforms, forming a P2P secondary market for buying and selling; and centralized exchanges such as this market already exist.
Inscriptions can be created at will, users can inscribe as they please, and the newly inscribed tokens can be sold on the P2P secondary market on some platforms, but the new inscriptions "inscribed" here are not easy to sell.
OKX Web3 wallet almost includes all of the 50,000+ BRC-20 tokens, including those that have been fully produced and those in the process of being inscribed. However, only 50 have made it to the popular trading list, with 38 having over 100 transactions in 24 hours.
At 14:16 on December 20, the BNSx had the highest number of transactions on the popular list in the OKX Web3 wallet, with 544 transactions in 24 hours, a trading volume of $1.64 million, held by 4,566 people, a floor price of $1.45, a daily high of $2.22, an increase of only 50%, far from the hundredfold and thousandfold tokens.
On the other hand, SAT had the lowest number of transactions, with only 9 transactions in 24 hours, with a trading volume of $269,400, but due to SAT's floor price of only $0.000000029, it tripled within the day. However, the token is held by only 43 people, and the trading market has become a small group game.
A cryptocurrency trader who participates in inscribing tokens referred to the value of inscribed token coins lying in wallets as "book value." After experiencing it firsthand, he pointed out the problem with this 1-1.5 level market: you can only list it for sale, there are no buy orders.
"The biggest difference from the order book on CEX is that the seller cannot actively cash out. When the capital sentiment is FOMO, everything is thriving. However, when the capital sentiment begins to ebb, it is difficult to quickly realize the market value," he emphasized. "Unless the main inscribed tokens are the leaders already listed on exchanges, otherwise, how much you can cash out depends on luck."
Some applications have started to address the issue of poor liquidity. UniSat has launched the brc20-swap decentralized trading application, but the open BRC-20 assets are less than 20, which cannot meet the seller's demand.
Indeed, the real wealth effect comes from inscription tokens listed on centralized exchanges like Binance and OKX, such as ORDI and SATS, which have spread "wealth stories" across various communities. Centralized exchanges attract more funds and users, harboring desires for hundredfold and thousandfold gains.
But it's not easy for inscription tokens to be listed.
On CoinGecko, a third-party website that records the assets of various exchanges, as of December 20, there were fewer than 70 tokens labeled "Ordinals" and "BRC-20," and only 39 BRC-20 tokens with actual trading volume and depth, with 10 having a market value of over $10 million.
This means that only 1% of the 50,000+ BRC-20 tokens are listed on centralized exchanges. However, the delisting history of countless tokens tells us that this does not rule out the possibility of going to zero, and the fate of the other tens of thousands of tokens is unknown.
However, more tokens with uncertain fates are still emerging, and other blockchains are also coming in response to the news.
Scams and Farces Take Turns
Due to the congestion caused by inscribing tokens on the Bitcoin network, transaction fees have continued to rise.
Users participating in BRC-token inscription claim that the cost of inscribing a new token used to be between $0.25 and $0.5, with 100 tokens costing only 200-400 RMB, but now "the cost is often over $5, and there are even tokens that cost over $10 each."
Many people feel it is not safe to invest 3,000 or 5,000 yuan in inscribing tokens just to get listed on an exchange.
No problem, the Ethereum-compatible blockchains that emphasize low fees and high transaction speeds are coming to the inscription stage. Various protocols are appearing on these Layer1 and Layer2 networks, allowing for the creation, inscription, and distribution of tokens, with a single token cost not exceeding $1.
As of now, networks such as Ethereum (ETH), Solana (SOL), Avalanche (AVAX), Injective (INJ), and Starknet have all seen the emergence of inscription protocols that integrate inscription issuance, inscription, and trading. The related tokens are also emerging one after another.
It's not easy to get listed on centralized trading platforms, but there are many decentralized trading applications (DEX) on various chains, creating another liquidity market. However, the wealth myths brought about by inscriptions like ORDI and SATS have not appeared in this market. Instead, the prices of various Gas tokens have increased due to the demand and consumption of inscribing tokens. In the past 24 hours, the prices of SOL, AVAX, and INJ have all increased by over 20%.
Following that, a ridiculous scene unfolded. The traffic brought about by inscriptions directly challenged some EVM chains that claim to have "smooth trading."
On December 5, the inscription protocol Tonado's token TON20 was listed on the TON blockchain, and the surge in millions of transactions caused prolonged delays in transaction processing on the TON network, even though network validators were still producing blocks, the verification could not keep up. Two days later, the on-chain encrypted wallet of TON was forced to suspend service.
On December 16, the Ethereum Layer 2 network Arbitrum officially announced that the Arbitrum One sequencer stopped running at 10:29 am Eastern Time due to a significant increase in network traffic, caused by the surge in user volume due to the inscription protocol, resulting in the Arbitrum sequencer ceasing to function, ultimately leading to a network outage. The next day, another major Layer 2 network, zkSync, also experienced a short-term outage due to the inscription of SYNC tokens.
When traffic "mindlessly rushes in," some inscription projects began to "act unethically."
For example, the first inscription project CIAS on the modular blockchain Celestia was suspected by the community of plagiarizing the COSS inscription code, and CIAS also experienced "RPC failures" during inscription, forcing it to suspend inscription.
And the inscription project INJS on the Injective blockchain experienced problems within 12 hours of its announcement. In the afternoon of December 19, "abnormal inscription activity was detected"; in the evening, the official Injective blockchain warned users not to participate in INJS inscription because "the team is not honest, they charge inscription fees and deposit them into unverified wallets"; ultimately, INJS was aborted, and the project announced the suspension of inscription and the refund of user funds.
In contrast to the farce, the traps are even more frightening.
In May of this year, there were already fake websites imitating the inscription wallet UniSat. The domain of this fraudulent website added an "s" after "unisat" and optimized it for SEO on Google search engine, luring users to click. Some users have reported being scammed and losing BTC.
Some wrongdoers take advantage of the fact that inscription tokens are named with letters, and they list fake inscriptions with similar or easily confused names on some trading platforms, waiting for careless users to make a mistake.
Some people even provide scripts for the risk of inscribing tokens. Some users who don't understand code find that after copying and inscribing, the tokens they paid for did not end up in their wallets, but were instead "stolen" by the sender of the script who changed the code and "stole" them, taking advantage of others.
Perhaps many people are thinking about this question:
If BRC-20 has brought the previously difficult "issuance" function to the Bitcoin network and is therefore somewhat innovative, what have the EVM chains, which already have the function of issuing assets, actually created? If the EVM chains already have the function of issuing assets, why does the Bitcoin network, which already has limited network capacity, need to "go the extra mile"?
However, the FOMO sentiment in the cryptocurrency market cannot accommodate the question of "why," everything is about "profit."
The traffic is afraid of missing out on the jackpot—inscribed tokens can be listed on exchanges; exchanges want the traffic to come quickly and are selecting assets with high popularity to list; miners also hope for the traffic to continue, so they can receive transaction fee rewards…
When some people profit, others lose.
"Lost 50,000 in 3 days…" a cryptocurrency old hand who is afraid of missing out on inscriptions posted in a group and complained, and someone bluntly circled a certain coin in the post, saying, "So this is the coin that's been cutting you."
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