Inscription Protocol Explained: Understanding Principles and Asset Security

Recently, many mainstream trading platforms have successively launched inscription markets, supporting various inscription protocols such as BRC-20 and EVM, which has attracted widespread attention in the market. However, due to the complexity and novelty of inscription protocols, various security issues have frequently arisen, posing a threat not only to user asset security but also having a negative impact on the healthy development of the entire inscription ecosystem.

To help users understand the uses of the inscription protocol, how it is implemented, and how to protect inscription assets, this article will outline the mainstream inscription protocols.

Inscription Introduction

Inscription on the blockchain is the recording of information with specific meanings on the chain, leveraging the characteristics of blockchain. Once this information is written to the blockchain, it is permanently stored and difficult to alter. The types of information that can be recorded are diverse, including simple text, complex code, images, etc., thereby enabling digital asset functionality.

Inscription Status

Since the emergence of inscriptions like BRC-20 on the Bitcoin public chain, the inscription ecosystem has developed rapidly, with new inscription protocols and projects emerging almost every day. Major public chains have joined the inscription ecosystem, such as the Ethscription protocol on the ETH chain, the ARC-20 protocol on the BTC chain, the BSC-20 protocol on the BSC chain, and the PRC-20 protocol on the Polygon chain, etc. These protocols aim to enable the issuance of inscriptions on their respective public chains.

Main Inscription Protocol Analysis

1. BRC-20

The BRC-20 protocol is based on Bitcoin's UTXO model and the Ordinals protocol. The UTXO model records transaction events rather than final states, and to calculate the amount of coins a user holds, you need to sum all UTXOs for their address. The Ordinals protocol assigns a unique number to each satoshi in a UTXO, supporting the writing of various types of data, making each satoshi unique.

BRC-20 writes uniformly formatted JSON text data into Satoshi through the Ordinals protocol as a token ledger. It mainly includes three operations: deploy(, mint), and transfer(. The transfer operation achieves balance changes by sending inscriptions to the target address.

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) 2. ARC-20

ARC-20 is also an inscription protocol on the Bitcoin public chain, implemented by writing standard data in UTXO. However, ARC-20 does not need to specify the token amount in the data but uses the amount of satoshis in UTXO to represent the token amount, with the rule being 1 satoshi = 1 ARC-20 token.

ARC-20 is also divided into three steps: deployment, minting, and transfer. During deployment, token information is filled in; during minting, only the token name is filled in, and the number of UTXO satoshis is the minting quantity; during transfer, the UTXO holding the tokens is directly transferred to another address.

Querying ARC-20 tokens requires only an index, and the server can directly read the UTXO's satoshi amount to obtain the holding quantity, without the need to calculate the fund transfer relationships.

3. Ethscription

Ethscription is a protocol for creating and sharing data on Ethereum. It utilizes the calldata data blocks in Ethereum transactions to add standard data that imparts specific meanings during regular ETH transfers.

When creating an Ethscription, the content ( must be converted to a Base64 encoded URI like the image ), and then converted to a hexadecimal string to be filled into calldata. To transfer the Ethscription, the hash of the transaction creation must be filled into the calldata.

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) 4. EVM blockchain inscription

EVM blockchains such as BSC, Ethereum, and Polygon use a similar method to store fixed-format data in calldata. Taking BSC as an example, the inscription format is :data:,{"p":"","op":"","tick":"","amt":""}, where p represents the protocol name, op represents the operation, tick represents the token name, and amt represents the quantity.

When transferring tokens, you need to send a normal transfer to the receiving address and fill in the transaction hash of the created token into the calldata. There may be slight differences between different EVM chains or protocols, but the principle is similar.

Summary

This article discusses the implementation principles of inscriptions on multiple chains. In general, these inscriptions utilize the characteristics of public chain systems to store offline information on the blockchain according to specified standards, and are displayed through offline servers. The introduced inscriptions do not use smart contracts, which can reduce additional transaction costs for users, but users need to fully understand the implementation methods of the inscription protocol to avoid operational errors that may lead to asset losses.

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