Inscription Protocol Analysis: Implementation Principles, Application Scenarios, and Security Considerations

Recently, several well-known trading platforms have successively launched inscription markets, supporting various inscription protocols such as BRC-20 and EVM, which has sparked widespread attention in the market towards inscriptions. However, due to the complexity and novelty of inscription protocols, various security issues have arisen frequently, which not only threaten the security of user assets but also have a negative impact on the healthy development of the entire inscription ecosystem.

This article will organize the mainstream inscription protocols to help users understand the uses, implementation methods, and how to protect inscription assets.

Inscription Overview

Inscription is a mechanism on the blockchain that permanently records information with specific meanings. Once recorded, this information is difficult to alter and can be simple text or complex code, images, etc. The standardized inscription protocol enables the functionality of digital assets.

Inscription Ecosystem Status

Since the emergence of BRC-20 and other Bitcoin blockchain inscriptions, the inscription ecosystem has developed rapidly. Currently, multiple public chains have joined the inscription ecosystem, including:

• The Ethscription protocol of the ETH public chain
• ARC-20 protocol of the BTC public chain
• BSC public chain's BSC-20 protocol
• Polygon public chain's PRC-20 protocol

These protocols are designed for issuing inscriptions on their respective public chains.

Detailed Explanation of Mainstream Inscription Protocols

1. BRC-20

BRC-20 is based on the Bitcoin UTXO model and the Ordinals protocol.

The unspent transaction output UTXO( is the basic unit of Bitcoin transactions. The Ordinals protocol assigns a unique number to each Satoshi in the UTXO), the smallest unit of Bitcoin (, and supports writing various data.

BRC-20 writes uniformly formatted JSON text data into Satoshis through the Ordinals protocol, serving as a ledger for BRC-20 tokens. It mainly includes the following operations:

• deploy: deploy token
• mint: mint tokens
• transfer: transfer tokens

By analyzing this textual data, we can deduce the holding and transfer status of the tokens.

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) 2. ARC-20

ARC-20 is also based on the Bitcoin UTXO model, but differs from BRC-20:

• The ARC-20 does not specify the token amount in the data.
• Use the number of satoshis in the UTXO to represent the token amount ### satoshi = 1 ARC-20 token (

ARC-20 is also divided into three steps: deployment, minting, and transfer.

• Deployment: Fill in the token name, total amount, and other information in the UTXO.
• Minting: Fill in the token name in the UTXO, and the amount of satoshis in the UTXO is the minting quantity.
• Transfer: Directly transfer the UTXO holding tokens without entering additional data.

When querying the balance of ARC-20 tokens, simply read the number of satoshis in the UTXO holding that token.

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) 3. Inscription

Ethscription uses the calldata data blocks of Ethereum transactions to create and share data.

Create Ethscription:

1. Convert the content ###, as shown in the image (, to a Base64 encoded URI.
2. Convert URI to hexadecimal string
3. Send a regular ETH transfer, fill the hexadecimal string into calldata.

Transfer Ethscription: The sender transfers to the receiving address, filling in the transaction hash that created the Ethscription in the calldata.

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) 4. EVM Chain Inscription

The inscription protocols of EVM chains such as BSC, Ethereum, and Polygon are similar, all utilizing calldata to store fixed format data.

Taking BSC as an example, the inscription format is:

data:,{"p":"","op":"","tick":"","amt":""}

• p: protocol name ### like bsc-20(
• op: operation ) like mint (
• tick: Token Name
• amt: token amount

Send a regular transfer to the target address during minting, and fill in the above format data in calldata.

Transfer to the receiving address, filling in the transaction hash that created the token in the calldata.

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Security Precautions

1. The BTC inscription protocol is based on UTXO transactions, and users making ordinary BTC transfers may mistakenly transfer or "burn" inscription assets.

2. Fully understand the implementation principles of each inscription protocol to avoid operational errors that may lead to asset loss.

3. Although inscription trading can reduce additional fees, users must exercise extra caution to ensure correct operation.

4. The inscription data formats of different EVM chains or protocols may vary, so be sure to distinguish them when using.

5. Inscription assets are identified and displayed by offline servers, so it is important to choose a trusted indexing service.

In summary, while inscriptions lower the cost of user participation, their specificity also brings new security risks. Users should fully understand the relevant knowledge and operate cautiously when participating in the inscription ecosystem to ensure asset safety.

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