Ethscriptions: One Year Ahead and What’s Next
preface
June 18, 2024 marks the first anniversary of the Ethereum inscription technology and its token ETHS. This technology aims to share information and perform computations on the Ethereum mainnet at a lower cost, as an alternative to Ethereum's second-layer solution, directly expanding the capacity of the mainnet. Over the past year, Ethscriptions has made significant progress in technological innovation and application. This article will review the development of Ethscriptions over the past year and look forward to its future development potential.
Technological progress
1. Efficient and low-cost data storage
When the Ethscriptions protocol was first created, it cleverly utilized the calldata storage space of the Ethereum mainnet to enable data to be written directly into blocks, thus meeting the need for permanent storage of NFT data. This innovation not only enhances the reliability and durability of data, but also reduces the cost of corresponding storage. Previously, NFT data was stored in off-chain servers or cloud services such as Filecoin. Once the project party stops the service or modifies the NFT content, users will suffer huge losses. At the same time, through the collision of ideas between the founders and the ETHS community, a technical solution for mainnet expansion with off-chain computing and corresponding index open source was further derived, which was implemented and iterated and upgraded during the year.
After the Cancun upgrade this year, Blob introduced in EIP-4844 enables anyone to store data on Ethereum at a price 10 to 100 times cheaper than calldata. In response, Tom Lehman @dumbnamenumbers, the founder of the Ethscriptions protocol, created Blobscriptions by upgrading ESIP-8 https://docs.ethscriptions.com/esips/esip-8-ethscription-attachments-aka-blobscriptions , and cleverly used the new features of Ethereum to further reduce the cost of engraving, while expanding the storage capacity of data. However, Ethereum itself does not guarantee the availability of Blob data for more than 18 days, and the indexer of Ethereum inscriptions will store this data indefinitely. This innovation was thanked by Ethereum founder Vitalik in a special article. Blobscriptions, namely ESIP-8, successfully activated the Blob price discovery mechanism after the Cancun upgrade.
2 Ethereum Mainnet Expansion Technology Solution
The Facet computing platform developed based on the Ethscriptions protocol was launched on the mainnet on November 30, 2023. The platform moves a large number of complex deterministic computing tasks to the off-chain for processing, and synchronizes the calculation results to the chain in real time. Due to the determinism of the calculation execution process itself, users do not need to bear the additional calculation execution costs of the mainnet. The advantage of this is that it greatly reduces the gas fees required for on-chain calculations while ensuring the security and integrity of the Ethereum mainnet. This also significantly improves the utilization efficiency of on-chain resources and can support larger and more complex applications.
Source: Facet Team
Source: Facet Team
Ethereum L2 has always had the problem of over-centralization. In order to achieve low gas and high TPS, L2 chose to sacrifice the decentralized mechanism of blockchain and synchronize with the Ethereum mainnet through a centralized sequencer. Once L2 is shut down or closed, the assets stored by users on L2 will be greatly affected, and may even cause huge losses. The Linea hacker attack that occurred last weekend, the 1-hour downtime and address review incident once again reminded of this risk. At the same time, for L2 with a corporate operating mechanism, once there is a downtime or closure incident caused by the inability to continue financing, there will be great risks for user assets on the L2 chain.
Facet has actually become the L1+ expansion solution for the mainnet. Its essence is to use the Ethereum mainnet as a committed anchor layer and perform off-chain client verification (open source multi-node) based on the account model. The comparison between sovereign-based Rollup and L2 is shown in the following table:
Source: https://x.com/posvar/status/1794104032446869754
3. Multi-chain expansion potential
Although Ethscriptions and Facet computing platforms are developed based on Ethereum, they can be extended to all EVM chains and UTXO networks through the CSV client verification mode (previously, overseas developers and founders have preliminarily discussed the technical route of combining RGB with Facet, hoping to expand it to the Bitcoin network. RGB is a BTC Turing-complete smart contract expansion solution that has been developed since 2016. The technical development has been slow due to the lack of a unified software engineering framework. Its main idea is off-chain client verification based on the UTXO model). For example, by hashing the large-scale structured data in the original database and then putting the hash value on the chain as a certificate, this can not only effectively reduce storage and computing costs, but also expand the application scenarios of blockchain. It is expected to achieve low-cost and rapid migration to the chain for web2 data services, and is also suitable for the combination of innovative fields such as Depin and AI (Agent) with blockchain.
Dapps Applications and Ecosystem
The Ethscriptions umbrella protocol and Facet computing platform are still in the early stages, and the Dapps application and ecosystem have yet to be enriched. With the unremitting efforts of the protocol founders and their teams, as well as new developers, infrastructure applications such as FacetSwap and FacetScan have been launched in the ecosystem this year, and a number of excellent third-party applications and platforms have also emerged.
1. On-chain DEX
FacetSwap is a decentralized trading Dex based on Ethscriptions technology. Its gas fee is only 1/10 to 1/20 of Uniswap, and it is planned to be further optimized to 1/100. FacetSwap has not only been successfully launched on major wallet platforms such as Binance Wallet, OK Wallet and Gate Wallet, but its number of users has surged to 26,763. Taking the Ethscriptions pioneer leading token $eths as an example, the total transaction volume on Facetswap from June 18, 2023 to May 21, 2024 was 80,000+ETH (about 290 million US dollars), the current liquidity pool is 135 WU, and the highest daily transaction volume is 2,000 ETH. This achievement demonstrates the great potential of Ethscriptions in reducing transaction costs and improving user experience. At present, the overall TVL on the Facet computing platform has reached 40 million US dollars.
2. On-chain native Non-Fungible Tokens (NFT)
Ordex.io is another trading market based on Ethscriptions technology, focusing on NFT and Ethereum inscription order transactions, and is affiliated with Facet. The platform not only supports the issuance and sale of NFTs, but also lists and trades Ethereum inscription tokens, making the permanent preservation of on-chain data possible. At the same time, Ordex.io solves the high cost and low efficiency problems prevalent in the NFT market through its efficient data management and storage mechanism.
3 ERC-20 Token Wrapper and Trading Bot
On April 3, 2024, Facet launched support for ERC-20 token wrappers. Users can directly wrap all ERC-20, USDT, WBTC and other tokens, and conduct low-cost transactions and token launches on the Facet platform. At the same time, a development team formed by the original pepe founding team members in the ecosystem has developed a dedicated transaction bot sniper based on Telegram, which can provide all users with more convenient trading functions and services for Ethereum inscription tokens and wrapped Erc-20 tokens on Telegram.
The application scenarios and corresponding cost comparison table that can be achieved through the Facet decentralized computing platform are as follows:
Source: Facet team, note that in common smart contract scenarios, gas is used to prove that synchronous execution of smart contracts does not mean high cost
Future Outlook
Over the past year, the Ethscriptions umbrella protocol and Facet computing platform have been successfully running on the Ethereum mainnet, providing users with lower-cost and more efficient blockchain solutions. After the founding team has verified the feasibility of its technology and developed practical use cases, the following areas of work will be focused on in the future:
1. Continuous technological innovation and implementation
The technological innovations that can be expected in the future will focus on the following aspects:
Performance optimization: further improve the synchronization efficiency of on-chain and off-chain computing, and further optimize data storage and transmission costs.
Asset composability: The composability of inscription assets is achieved through recursion and other methods.
Enhanced security: Through more stringent and advanced security measures, the security of data and user assets on the Ethereum mainnet chain is guaranteed.
Scalability: Develop more cross-chain solutions so that Ethscriptions can be applied not only to Ethereum but also to a wider range of blockchain networks.
2. Ethscriptions Umbrella Protocol and Facet Ecosystem Applications and Market Penetration
Collaborate with more blockchain projects: Promote the common development of technology and ecosystem through cooperation with other blockchain projects. This includes not only projects within the Ethereum ecosystem, but also projects in the wider blockchain field.
Try to promote enterprise applications: By hashing complex data and putting it on the chain, it provides traditional enterprises with an efficient and low-cost data management and storage solution. This will help enterprises realize data.
Open source community building: Through Gitcoin and the upcoming Facet Grant, as well as the continued support and donations from the Ethscriptions community, we will establish close interaction and technical exchanges with the Ethereum developer community, while attracting more developers to join the open source construction of Ethscriptions and the Facet computing platform.
On May 17, Ethereum founder Vitalik published his latest article on his homepage, "The near and mid-term future of improving the Ethereum network's permissionlessness and decentralization", which talked about Ethereum's near and mid-term goals: to continue to improve Ethereum's permissionlessness and decentralization. Although this article does not talk about many new technologies, it once again makes it very clear that Ethereum's core and most important characteristics are permissionlessness and decentralization.
People like to use the permissionless and decentralized Ethereum mainnet. On the premise of ensuring 100% security, we should be more tolerant of Ethereum's implementation of innovative expansion plans and increase ecological support, listen to the true voices of ordinary users in the community, especially in the Web3 infrastructure vote at the G20, which ranked first in total amount (51,000 US dollars) and total number of votes (8,881) for Facet, a decentralized computing platform developed based on the Ethscriptions umbrella protocol.
We have reason to believe that with the attention and promotion of Vitalik and the Ethereum Foundation, and through the efforts of the community, founders, exchanges and other industry parties, Ethscriptios will further evolve and develop into an Ethereum mainnet expansion solution with official legitimacy, a strong ecosystem, a unified community, and the ability to carry larger-scale users and data-level businesses.
Appendix 1: A brief history of Ethscriptions
2023/06/18, Ethscription protocol was born, $ETHS inscription was launched fairly
2023/08/15, the Ethscription protocol was recognized by the Ethereum Foundation as Ethereum infrastructure
2023/10/09, Bitget Wallet officially supports the Ethscriptions protocol
2023/10/12, Gate Wallet officially supports the Ethscriptions protocol
2023/11/09, OKX Web3 Wallet officially supports Ethscriptions protocol
On November 30, 2023, Facet, a decentralized computing platform developed based on Ethscriptions, officially launched FacetSwap, successfully reducing gas interaction to 1/10-1/15 of Uniswap.
On December 23, 2023, BIT, BitKan, and BitMart exchanges officially launched $ETHS tokens
2023/12/25, OKX Web3 Wallet connected to FacetSwap, supporting flash exchange transactions
2024/01/04, Ethscription index officially open source
2024/02/01, Binance Wallet officially supports the Ethscriptions protocol
2024/02/25, Coinbase/Forbes listed Ethscriptions as a new type of digital asset token and launched a dedicated website
2024/03/27, ESIP-8 Blobscriptions released
On March 28, 2024, Ethereum founder Vitalik tweeted to thank Blobscriptions (ESIP-8) for successfully activating the Blob price discovery mechanism after the Cancun upgrade.
On May 8, 2024, the Facet project, a decentralized computing platform developed based on Ethscriptions, won the first place in the total amount of the G20 infrastructure sector with a donation of 51,000 US dollars, and the number of independent donation addresses reached 8,881.
On June 1, 2024, the on-chain transaction volume of the pioneer leading token $ETHS exceeded 10.6 W ETH, about US$400 million, of which the on-chain transaction volume of FacetSwap reached 80,000+ ETH (about US$290 million), with the highest daily transaction volume of 2,000 ETH; the number of Ethereum addresses with Ethscriptions assets exceeded 180,000.
