Over the past five days, users on the Avalanche network have spent millions of dollars on fees to create and transfer tokens related to inscriptions. This surge in network activity seems to be the cause behind the significant transaction costs.
Over the past five days, users of Avalanche (AVAX) paid a whopping $13.8 million in transaction fees for minting and transferring tokens and NFTs associated with inscriptions. Inscription-based tokens involve adding text to regular blockchain transactions, and they’ve gained popularity due to their cost-effectiveness compared to native tokens. This surge in fees on Avalanche highlights the increased activity and utilization of inscriptions for creating tokens and digital assets on the platform.
Avalanche Surges: $13.8M Fee Spike Amid Token Inscriptions
Inscription-based tokens, originating as a workaround on Bitcoin due to its lack of native token support, involve adding text to regular blockchain transactions. Recently, they have proliferated across various blockchains, offering cost advantages in movement compared to native tokens.
While chains like Polygon and BNB Chain saw the creation of tens of millions of such tokens, users collectively paid around a million dollars in fees for each chain. Avalanche, in particular, experienced a surge in transaction fees related to inscriptions, reaching as high as $5.6 million per day in recent times.
The total fees on Avalanche constitute roughly 70% of all inscriptions fees tracked by a Dune Analytics dashboard, signaling a notable trend in the crypto space.
Source: Dune Analytics/Hildobby
Avalanche has witnessed two distinct periods of heightened interest in inscription-based transactions. The first, occurring in late November and spanning about five days, generated approximately $1.5 million in transaction fees. However, the more recent period has seen significantly higher fees, primarily attributed to a notable increase in non-inscription transactions, driving overall demand for block space.
Transaction costs on the Avalanche network have been on a steady climb this month, marked by a noteworthy spike exceeding 5,000 nAVAX (gas price per unit) on December 18. The blockchain has processed a total of 61 million inscription-related transactions, ranking third among chains, with BNB Chain leading at 77 million and Polygon PoS at 161 million transactions. According to the Dune Analytics dashboard, Avalanche currently hosts over 1,160 inscription collections, signifying a substantial surge in activity.
Arbitrum Sees $3M in 3-Day Fees Amid Inscription Surge
Users engaging in the creation and transfer of inscription-based tokens on Arbitrum have experienced a notable uptick in transaction fees, amounting to approximately $3 million over the past three days. This constitutes around 15% of the total fees spent on the blockchains tracked in the Dune Analytics dashboard.
Source: Dune Analytics/Hildobby
While the overall number of inscriptions across various blockchains has remained relatively stable, there has been a sharp increase in the number of addresses utilized for inscription-related transactions. Previous peak days involved around 50,000 addresses, whereas recent activity, particularly on BNB, Avalanche, and zkSync Era, saw a substantial surge, with 180,000 addresses participating. This trend suggests a widespread adoption of inscription-related activities across different blockchain networks.
Despite the sudden spread of inscription transactions, as long as miners and validators can effectively manage the heightened network activity, the increased income generated from transaction fees is likely to be appreciated within the blockchain community.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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