Written by: Weilin
"At 1am, type iotx inscriptions, at 2am, type Tia inscriptions, at 3am, type inj inscriptions, at 4am, type op inscriptions..." This widely forwarded post on social networks condenses the enthusiasm of Web3 users for the inscription market.
Since December, Inscription, a method of using Bitcoin and other blockchain networks to mint crypto assets (homogeneous/non-homogeneous), has become popular and has already "wasted" many Web3 people.
The popularity is largely due to the skyrocketing prices of ORDI and SATS tokens after they were listed on centralized cryptocurrency exchanges. They are BRC-20 tokens in the Bitcoin Inscription ecosystem.
The former rose from a low of $2-3 to $68, creating a market value of $1.3 billion; the latter became the hottest "zero elimination game" this year, with the price dropping two "zeros" from the 9th decimal point to a maximum of $0.00000092, a 100-fold increase. The prices they generated in the early days of the Bitcoin network were much lower than when they were launched on the secondary market.
The "wealth myth" brought by the surge in secondary market prices is the catalyst for Web3 players to "grind" for inscriptions. It is rumored on social networks that a large investor who invested in ORDI and SATS half a year ago has earned $36 million in "fast freedom".
Such stories always stimulate the nerves of speculators and trigger traffic aggregation. Anonymous project owners are also very sharp and have developed various inscription tokens for players to "fight". The blockchains that generate these tokens, such as Bitcoin, Ethereum, Solana, Avalanche, and Injective, have all experienced network congestion and rising fees, which shows how crazy the market is.
The other side of the craze is that the current "wealth effect" is not as strong as imagined, and even hides risks: in the P2P wallet trading area for "inscription" of BRC-20 tokens, there are more sell orders for new inscriptions than buy orders, and the liquidity of the 1.5-level market is not strong; and large exchanges that truly gather funds and traffic have not launched many new inscription tokens; and the Injective chain inscription project INJS ended in "abortion" and refund in less than 12 hours; there are also phishing websites, fraud risks of fake inscriptions and cases of asset theft in the market.
The inscription market began to give rise to various "unethical" chaos from its "unreasonable" growth.
The speculated "wealth creation myth"
"Profits of more than 36 million US dollars, a great leap in wealth." The story comes from the analysis post of @riyuexiaochu, a crypto asset KOL on the social platform X. On December 13, he observed from the changes in the on-chain addresses that an address with 64 trillion SATS tokens "was sold for profit after SATS was listed on Binance, with a value of 36 million US dollars, or about 260 million RMB."
@riyuexiaochu also found that this address, which had previously collected ORDI, once owned nearly 1 million ORDI and sold them on the exchange Gate.io on May 12. "The price was 10-12 dollars at the time, worth tens of millions of dollars. He bought it a few days after April 20, and it is estimated that the profit was at least 5 million US dollars."
This tweet analyzing the SATS and ORDI on-chain data attracted 144,000 people to watch. Someone posted a SATS account with a floating profit of 32.89 million in the comment section and added a note "Thanks, I'm quitting the circle". His X was mostly shouting orders for another BRC-20 token DOVI; someone else shouted orders for 3518 "digital inscriptions" in the comment section.
More calls of letters and numbers representing the names of inscription tokens are flooding the "square" of the social section of X and Binance, where various versions of the inscription "wealth-making" stories, experiences of working hard to get inscriptions, and teaching materials are also circulating.
The skyrocketing prices of ORDI and SATS have supported these "myths" and the pursuit of these actions. Known as "inscription tokens", they each have their own stories, but the common feature is that they are all generated on the Bitcoin blockchain, and the project owners are anonymous.
ORDI was born (started minting) on March 8, 2023. It was created by a developer with the username @domodata, who used the Ordinals protocol, which numbers the smallest unit of Bitcoin, Sat, to issue the "experimental BRC-20 token ORDI".
This protocol was released on the Bitcoin mainnet by software engineer Casey Rodarmor in January 2023. Casey's original intention was to bring the ecosystem of non-fungible tokens (NFTs) to the Bitcoin network, but @ domodata set "additional information as a unified standard" to give the Ordinals protocol the same capabilities as the Ethereum ERC-20 standard - everyone can issue homogenous tokens. Most importantly, this is a token issued on the Bitcoin network.
ORDI was born, and the number of 21 million issued also commemorated a handful of Bitcoin. Since then, ORDI has had a price in the embedded trading market of the wallet that minted it, initially only $0.005. In May, ORDI began to appear on centralized crypto asset exchanges, and it soared to $17 as soon as it was launched, a 3,400-fold increase. Even if it eventually fell back to the $2-3 range, the increase was still 300-500 times.
Even up to this point in the story, the inscription fever brought by ORDI has only spread within the inscription circle, where there are many other inscription tokens issued using the @domodata method, and then given to players who love inscriptions to cast.
Within a month after ORDI was issued, more than 2,000 BRC-20 tokens were born, including the later popular SATS.
Today, there are more than 58,000 types of BRC-20 tokens in the market of Bitcoin inscription wallet UniSat, with an average of 6,500 new types created each month. Most of them are created by anonymous people themselves. There are more than 20,000 inscription tokens that have successfully completed 100% of the progress bar, but only 22 of them have more than 5,000 holding addresses.
Top 20 BRC-20 tokens by number of addresses
Inscriptions have also brought a surge in transaction fees for the Bitcoin network. According to Dune Analytics data on December 19, the total cost of minting inscriptions on the Bitcoin Ordinals protocol reached 4282.5 BTC, equivalent to approximately US$176 million.
The reason that stimulated the rush of BRC-20 tokens is still the price of ORDI. The climax occurred on November 7, when Binance, the world's largest cryptocurrency exchange, launched ORDI. Since then, the token has risen from around US$5 to a high of US$69.8. In less than a month, the increase was 1296%. Compared with the issue price in early March, the increase was as high as 1395900%, which is more than the increase of Bitcoin in 10 years (62325%).
SATS, which was issued only one day later than ORDI, was also driven. The story of this token is "a tribute to Satoshi (Satoshi Nakamoto), the founder of Bitcoin". It was pushed to the minters of the Inscription Token with an issuance volume of 210 trillion. After entering the secondary market, it became another "Meme Coin Zero-eliminating Game", from the early high of US$0.0000000091 to the historical high of US$0.00000092, eliminating 2 "0"s in half a year and increasing 100 times.
While the old hands in the cryptocurrency circle are discussing what the inscriptions are used for, the users who put inscriptions don’t care so much. The BRC-20 token has once again formed a market phenomenon unique to crypto assets: unreasonable growth.
The Meme coin craze in the last bull market was once sneered at by old investors, but it also produced coins that increased in value by a thousand times or even ten thousand times. Now, Inscription Token has become another fanatical "casino" where people try to make a small fortune with a small investment.
The inscriptions produced by "hard work" are not selling well
SATS’ current market value is $1.449 billion, which has surpassed the first Inscription token ORDI’s $1.087 billion. Holders of both parties even competed on social networks over who is the “leader.”
Some BRC-20 tokens have been launched on centralized trading markets. RATS, BTCs, etc. are refreshing their market values with their own stories, driving up market sentiment towards FOMO. Experience posts with the inscription “Grit” continue to appear on social networks.
BRC-20 tokens that are not listed on exchanges are lying in the wallets of their holders, while players are waiting to "get rich by listing on exchanges"; there are even more tokens whose progress bars have not reached 100%, waiting for people who dream of financial freedom to "grind" for them.
UniSat website showing BRC-20 tokens waiting to be minted
At the same time, there are more and more wallets on the market that meet the needs of "inscription". In addition to UniSat, the earliest and largest Bitcoin inscription plug-in wallet, OKX Web3 Wallet, Ordinals Wallet, Hiro Wallet, and Xverse have also begun to support the storage, sending/receiving, and transfer of Bitcoin inscriptions and BRC-20 tokens, and some even support minting, i.e. "inscription".
So far, Bitcoin inscription tokens have formed a three-level market of level 1, level 1.5, and level 2. Wallets and various casting platforms are the primary market for "hard" inscriptions, and users need to spend BTC to make them; the inscriptions made can also be placed on some platforms, forming a P2P 1.5 level buying and selling market; and such a market as centralized exchanges already exists.
Inscriptions can be created at will, and users can use them as they like. After creating them, they can also sell them on the level 1.5 P2P market, but the new inscriptions that are "worked out" are not easy to sell here.
There are more than 50,000 BRC-20 tokens, and the OKX Web3 wallet covers almost all of them, including those that have been minted and those that are being minted. However, only 50 of them are on the hot trading list, and 38 of them have more than 100 transactions in 24 hours.
At 14:16 on December 20, on the BRC-20 hot list in the OKX Web3 wallet, BNSx had the highest number of transactions, 544 transactions in 24 hours, and a 24-hour trading volume of US$1.64 million. There were 4,566 holders of this token, the floor price was US$1.45, and the highest price during the day was US$2.22. The increase was only 50%, which is far from the 100x or 1,000x coins.
The coin with the lowest number of transactions is SAT, with only 9 transactions in 24 hours and a transaction volume of US$269,400 in the same period. However, since the floor price of SAT is only US$0.000000029, it has tripled in the past day. However, there are only 43 holders of this token, and the trading market has become a game for a small group of people.
A crypto asset trader who participated in the inscription process called the value of the inscription tokens lying in his wallet "paper profit". After personal experience, he pointed out the problem of this level 1-1.5 market: one can only place sell orders, but no buy orders.
“The biggest difference between this and our order book on CEX is that sellers cannot actively cash out. When the capital sentiment is fomo, of course 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 inscriptions held are the leading ones that have been listed on the exchange, otherwise, how much you can cash out depends on luck.”
Some application developers have begun to solve the problem of poor liquidity. UniSat has launched the brc20-swap decentralized trading application, but there are less than 20 open BRC-20 assets, which is simply unable to meet the needs of sellers.
Indeed, the real wealth effect comes from the inscription tokens that are listed on centralized exchanges such as Binance and OKX, such as ORDI and SATS, which spread the "wealth story" to various communities. Centralized exchanges bring together more funds and users, and have the desire to increase by a hundred or a thousand times.
But it's not that easy on the inscription tokens.
On CoinGecko, a third-party website that collects asset data listed on various exchanges, the number of tokens labeled "Ordinals" and "BRC-20" was less than 70 as of December 20, and there were only 39 BRC-20 tokens with real trading volume and trading depth, and 10 of them had a market value of over 10 million US dollars.
Top 10 BRC-20 tokens by market capitalization (data from Unisats and CoinGecko)
This means that only 1% of the more than 50,000 BRC-20 tokens are listed on centralized exchanges, but the history of countless token delistings tells us that this does not rule out the possibility of returning to zero, and the value and fate of tens of thousands of other tokens are unknown.
However, more Inscription tokens with uncertain fates are still emerging, and other blockchains are also following suit.
Scams and farces are staged one after another
Because the inscription has caused congestion on the Bitcoin network, transaction fees have continued to rise.
A user who participated in the minting of BRC- tokens said that the cost of buying one new inscription was between 0.25-0.5 US dollars in the past, and 100 inscriptions were only 200-400 RMB, but now "the cost is often more than 5U, and there are even more than ten U per inscription."
Investing 3,000 or 5,000 yuan into Inscription Tokens in the hope of getting listed on an exchange? Many people think this is not a safe idea.
It doesn’t matter. Ethereum and EVM-compatible blockchains, which focus on low transaction fees and high transaction rates, have come to the inscription stage. Various protocols have begun to appear in these Layer1 and Layer2 networks, issuing, minting, and dividing coins, with the main cost of a single coin not exceeding US$1.
As of now, networks such as Ethereum (ETH), Solana (SOL), Avalanche (AVAX), Injective (INJ), and Starknet have all launched inscription protocols that integrate inscription issuance, minting, and trading, and related tokens are also emerging in an endless stream.
It is not easy to access a centralized trading platform, but there are many decentralized trading applications (DEX) on each chain. Another liquid market has emerged, but there has not yet been a myth of getting rich quickly like ORDI and SATS.
On the contrary, the price of gas on each chain has indeed increased due to the demand and consumption of "inscription". In the past 24 hours, the increase of SOL, AVAX, and INJ has exceeded 20%.
Then, a funny scene appeared. The traffic brought by the inscription craze directly slapped the faces of some EVM chains that claimed to have "smooth transactions".
On December 5, the TON blockchain’s inscription protocol Tonado’s token TON20 went live. The surge in millions of transactions caused long delays in transaction processing on the TON network, and even though network validators were still producing blocks, verification could not keep up. Two days later, TON’s on-chain crypto wallet was forced to suspend service.
On December 16, Ethereum’s second-layer network Arbitrum officially announced that the Arbitrum One sequencer stopped operating at 10:29 a.m. Eastern Time during a period of significant network traffic surge. The reason was that due to the surge in the number of users brought by the inscription protocol, Arbitrum’s sequencer stopped working, which eventually led to the network downtime. The next day, another large second-layer network zkSync also experienced a short downtime due to the casting of SYNC inscriptions.
When traffic is "brainlessly rushed", some inscription projects begin to "lose martial ethics".
For example, CIAS, the first inscription project on the modular blockchain Celestia, was suspected by the community of plagiarizing the COSS inscription code. CIAS also encountered an "RPC failure" during minting and had to suspend minting.
However, problems arose with the inscription project INJS on the Injective chain within just 12 hours of its announcement. First, on the afternoon of December 19, “abnormal inscription activity was detected”; in the evening, the Injective blockchain officially issued a statement reminding users not to participate in INJS inscription because “the team is not honest, they collect minting fees and deposit them into unverified wallets”; eventually, INJS failed, the project announced the suspension of inscription and the refund of user funds.
What is more terrifying than the farce is the trap.
In May this year, a fake website imitating the inscription wallet UniSat appeared. The domain name of the fraudulent website added an "s" after unisat and did SEO optimization in Google search engine. The "Li Gui" was ranked before the "Li Kui" to lure users to click. Some users have reported that they were deceived and lost BTC.
Fake UniSat wallet sets up phishing trap
Some malicious actors take advantage of the fact that inscription tokens are named with letters and sell fake inscriptions with the same letters or easily confusing names on some trading platforms, waiting for careless users to buy them by mistake.
Some people even directly give risky scripts with inscriptions. Some users who do not understand the code find that after copying, pasting and typing inscriptions, the tokens they paid for did not end up in their wallets. Instead, they were "taken away" by the script sender after the code was changed, becoming someone else's wedding dress.
Perhaps, many people are thinking about this question:
If BRC-20 brings the previously difficult "coin issuance" function to the Bitcoin network, and therefore has a certain degree of innovation, then what exactly have the EVM chains that already have the asset issuance function created? If EVM chains already have the function of issuing assets, why does the Bitcoin network, which already has a small network capacity, need to "do this extra thing"?
However, the FOMO sentiment in the crypto asset market does not allow for "why" and everything is about "profit".
Traffic is afraid of missing out on the jackpot - the inscription tokens that are issued can be listed on exchanges; exchanges want traffic to come quickly and select hot assets to list; miners also hope that traffic will continue to come so that they can get transaction fee rewards...
When someone gains, someone loses.
"I lost 50,000 in 3 days..." An old crypto player who was afraid of missing out on the inscription posted his order in the group and complained. Someone unceremoniously circled a coin in the order and said, "It turns out that XX coin is for you."
