Introduction
June 18, 2024 marked the one-year anniversary of the birth of Ethscriptions, a technology and token called ETHS that aims to share information and execute computations on the Ethereum mainnet at a lower cost. As an alternative solution to Ethereum’s layer 2 scaling, Ethscriptions directly expands the capacity of the mainnet. Over the past year, Ethscriptions has made significant progress in technological innovation and applications. This article will review the development of Ethscriptions over the past year and discuss its future potential.
Technological Advances
1. Efficient and Cost-effective Data Storage
When the Ethscriptions protocol was first introduced, it utilized the calldata storage space of the Ethereum mainnet to directly write data into blocks, meeting the need for permanent storage of NFT data. This innovation not only enhances the reliability and durability of the data but also reduces the associated storage costs. Previously, NFT data was stored in off-chain servers or cloud services like Filecoin, which posed a risk of significant loss for users if the project ceased service or modified NFT content. Through collaboration between the founder and the Ethereum Inc. community, the concept of off-chain computation and corresponding indexed open-source mainnet scaling technology solution was derived and implemented during this year.
After the Cancun upgrade in May, the introduction of Blob in EIP-4844 allows anyone to store data on Ethereum at a price 10 to 100 times cheaper than calldata. Taking advantage of this new feature, the founder of the Ethscriptions protocol, Tom Lehman (@dumbnamenumbers), created Blobscriptions by upgrading ESIP-8 (https://docs.ethscriptions.com/esips/esip-8-ethscription-attachments-aka-blobscriptions). Blobscriptions cleverly reduces the cost of engraving while expanding the capacity for storing data. However, Ethereum itself does not guarantee the availability of Blob data beyond 18 days, whereas the indexer of Ethereum Inc. will store this data indefinitely. This innovation has received special thanks from Vitalik, the founder of Ethereum, and Blobscriptions, also known as ESIP-8, successfully activated the Blob price discovery mechanism after the Cancun upgrade.
2. Ethereum Mainnet Scaling Solution
The Facet computing platform, developed based on the Ethscriptions protocol, was launched on the mainnet on November 30, 2023. This platform moves a large number of deterministic complex computational tasks off-chain for processing and synchronizes the computation results to the chain in real-time. Due to the determinism of the computation process itself, users do not need to bear the additional cost of on-chain computation. The benefits of this approach include significantly reducing the gas fees required for on-chain computation while ensuring the security and integrity of the Ethereum mainnet. It also greatly improves the efficiency of on-chain resource utilization and supports larger scale and more complex applications.
The Ethereum L2 has always had the problem of excessive centralization. In order to achieve low gas fees and high TPS, L2 sacrifices the decentralization mechanism of the blockchain and relies on centralized sequencers to synchronize with the Ethereum mainnet. Once the L2 stops or shuts down, the assets stored on the L2 will be greatly affected, potentially causing significant losses. The recent Linea hack attack, which caused a one-hour shutdown and address review incident, once again highlighted this risk. At the same time, for L2 with corporate operational mechanisms, if a financing interruption leads to a shutdown or closure event, there will be a great risk to the user assets on the L2 chain.
Facet has actually become an L1+ scaling solution for the mainnet, using the Ethereum mainnet as an anchor layer of commitment and performing off-chain client verification (open-source multi-node) based on the account model. The comparison between the sovereignty-based Rollup and L2 is as follows:
3. Potential for Multi-Chain Extension
Although Ethscriptions and the Facet computing platform are developed based on Ethereum, they can be extended to all EVM chains and UTXO networks through the CSV client verification model. Discussions have already taken place between overseas developers and the founder about the technical route to combine RGB and Facet, hoping to extend it to the Bitcoin network. RGB is a Turing-complete smart contract scaling solution for BTC that has been under development since 2016. Due to the lack of a unified software engineering framework, progress has been slow. The main idea is to use off-chain client verification based on the UTXO model. For example, by hashing large-scale structured data in the original database and then using the hash value as proof on the chain, not only can storage and computation costs be effectively reduced, but also the application scenarios of blockchain can be expanded. It is expected to achieve low-cost and fast migration of web2 data businesses to the chain and is suitable for innovative fields such as Depin and AI (Agent) combined with blockchain.
DApps Applications and Ecosystem
The Ethscriptions umbrella protocol and the Facet computing platform are still in the early stages, and DApps applications and the ecosystem are yet to be enriched. With the relentless efforts of the protocol’s founder and team, as well as the participation of new developers, several infrastructure applications have been launched in the ecosystem, such as FacetSwap and FacetScan. Additionally, several excellent third-party applications and platforms have emerged.
1. On-chain DEX
FacetSwap is a decentralized exchange (DEX) based on the Ethscriptions technology. Its gas fees are only 1/10 to 1/20 of Uniswap’s fees, and there are plans to further optimize and reduce them to 1/100. FacetSwap has not only successfully launched on major wallet platforms such as Binance Wallet, OK Wallet, and Gate Wallet but also experienced a surge in user numbers, reaching 26,763. As an example, the leading token $eths of Ethscriptions had a total trading volume of over 80,000 ETH (about $290 million) on FacetSwap from June 18, 2023, to May 21, 2024, with a current liquidity pool of 135 WU and a peak daily trading volume of 2,000 ETH. This achievement demonstrates the enormous potential of Ethscriptions in reducing transaction costs and improving user experience. The overall total value locked (TVL) on the Facet computing platform has reached $40 million.
2. On-chain Native Non-Fungible Tokens (NFTs)
Ordex.io is another marketplace based on the Ethscriptions technology, focusing on the trading of NFTs and Ethereum engravings. It not only supports the issuance and sale of NFTs but also lists and trades Ethereum engravings, enabling permanent storage of on-chain data. Ordex.io solves the common problems of high costs and inefficiency 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 wrapping, allowing users to directly wrap tokens such as ERC-20, USDT, and WBTC for low-cost trading and token launches on the Facet platform. Additionally, a development team composed of former members of the original pepe team has developed an exclusive trading bot called sniper on Telegram, which provides more convenient trading functions and services for Ethereum engravings and wrapped ERC-20 tokens on Telegram.
Future Outlook
In the past year, the Ethscriptions umbrella protocol and the Facet computing platform have successfully operated on the Ethereum mainnet, providing users with a blockchain solution that is lower in cost and more efficient. After verifying the feasibility of their technology and developing practical use cases, the focus in the future will be on the following areas:
1. Continuous Technological Innovation and Implementation
Expected future technological innovations will focus on the following aspects:
– Performance optimization: Further improve the synchronization efficiency of on-chain and off-chain computation and optimize data storage and transmission costs.
– Asset composability: Achieve composability of engravings assets through recursion and other methods.
– Enhanced security: Ensure the security of on-chain data and user assets through stricter and more advanced security measures.
– Scalability: Develop more cross-chain solutions to make Ethscriptions applicable not only to Ethereum but also to a wider range of blockchain networks.
2. Application and Market Penetration of the Ethscriptions Umbrella Protocol and the Facet Ecosystem
– Collaboration with more blockchain projects: Promote the joint development of technology and ecosystems through collaborations with other blockchain projects. This includes not only projects within the Ethereum ecosystem but also the broader blockchain field.
– Explore enterprise applications: Provide traditional enterprises with efficient and low-cost data management and storage solutions by hashing complex data and storing it on the chain. This will help enterprises achieve data migration to the blockchain quickly and at a low cost.
– Open-source community development: Establish close interaction and technical exchange with the Ethereum developer community through Gitcoin, the upcoming Facet Grant, and continuous support and donations from the Ethereum Inc. community. Attract more developers to participate in the open-source development of the Ethscriptions umbrella protocol and the Facet computing platform.
On May 17, 2024, Vitalik, the founder of Ethereum, published a new article titled “The near and mid-term future of improving the Ethereum network’s permissionlessness and decentralization” on his homepage, discussing the recent and mid-term goals of Ethereum: continuous improvement of Ethereum’s permissionlessness and decentralization. Although the article does not mention many new technologies, it once again clearly emphasizes the most core and important characteristics of Ethereum: permissionlessness and decentralization.
People prefer to use the permissionless and decentralized Ethereum mainnet, and with the guarantee of 100% security, there should be a more tolerant attitude towards innovative scaling solutions for Ethereum and increased support for the ecosystem. It is important to listen to the voices of ordinary users in the community, especially in the Web3 infrastructure voting at G G20, where Ethscriptions’ decentralized computing platform Facet won first place in both total amount ($51,000) and total votes (8881).
We have reason to believe that with the attention and promotion from Vitalik and the Ethereum Foundation, as well as the efforts of the community, founders, and exchanges, Ethscriptions will further evolve into an Ethereum mainnet scaling solution with official legitimacy, a strong ecosystem, a unified community, and the ability to support larger-scale user and data volume businesses.
Appendix 1: Ethscriptions Development Timeline
– June 18, 2023: Ethscriptions protocol is born, and the fair launch of $ETHS engravings
– August 15, 2023: Ethscriptions protocol is recognized by the Ethereum Foundation as Ethereum infrastructure
– October 9, 2023: Bitget Wallet officially supports Ethscriptions protocol
– October 12, 2023: Gate Wallet officially supports Ethscriptions protocol
– November 9, 2023: OKX Web3 Wallet officially supports Ethscriptions protocol
– November 30, 2023: Facet, a decentralized computing platform developed based on Ethscriptions, is officially launched, successfully achieving gas interaction reduction to 1/10-1/15 of Uniswap
– December 23, 2023: BIT, BitKan, and BitMart exchanges officially list $ETHS token
– December 25, 2023: OKX Web3 Wallet integrates FacetSwap, supporting flash trading
– January 4, 2024: Ethscriptions indexer is officially open-sourced
– February 1, 2024: Binance Wallet officially supports Ethscriptions protocol
– February 25, 2024: Coinbase/Forbes lists Ethscriptions as a new type of digital asset token and launches a dedicated webpage
– March 27, 2024: ESIP-8 Blobscriptions is released
– March 28, 2024: Vitalik, the founder of Ethereum, tweets his gratitude for the successful activation of Blob price discovery mechanism after the Cancun upgrade
– May 8, 2024: Facet wins first place in the G G20 infrastructure category with $51,000 in donations, with a total of 8,881 independent donation addresses
– June 1, 2024: The total trading volume of $ETHS engravings exceeds 10.6 W ETH, about $400 million, with FacetSwap’s trading volume reaching over 80,000 ETH (about $290 million) during the period from June 18, 2023, to May 21, 2024, with a current liquidity pool of 135 WU and a peak daily trading volume of 2,000 ETH. The number of Ethereum addresses with Ethscriptions assets exceeds 180,000.
