Inscription Protocol Explained: Implementation Principles, Security Risks, and Asset Protection

Recently, several large trading platforms have successively launched inscription markets, supporting various inscription protocols, which has sparked widespread attention in the market towards inscriptions. However, due to the complexity and novelty of inscription protocols, various security issues have frequently arisen, posing threats not only to the security of users' assets but also having a negative impact on the healthy development of the entire inscription ecosystem.

Inscription Overview

Inscription is a specific functionality of the blockchain that records information of particular significance on the blockchain. Once this information is recorded, it is permanently stored on the blockchain and is difficult to alter. The types of information that can be recorded are diverse, including simple text, complex code, images, etc., thereby realizing the functionality of digital assets.

Inscription Development Status

Since the emergence of inscriptions like BRC-20 on the Bitcoin public chain, the inscription ecosystem has rapidly developed, with new inscription protocols and projects emerging almost every day. Currently, several mainstream 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.

Detailed Explanation of the Main Inscription Protocol

1. BRC-20

BRC-20 is based on the Bitcoin UTXO model and the Ordinals protocol. It writes uniformly formatted JSON text data into satoshis through the Ordinals protocol, serving as the ledger for BRC-20 tokens. It mainly includes three operations: deploy, mint, and transfer.

2. ARC-20

ARC-20 is also an inscription protocol on the Bitcoin public chain, but unlike BRC-20, it uses sats (satoshis) in the UTXO to represent the token quantity, with the rule being 1 sat = 1 ARC-20 token. ARC-20 also includes three steps: deployment, minting, and transferring.

3. Inscription

Ethscription is an inscription protocol on Ethereum that utilizes the calldata data blocks in Ethereum transactions. By adding standard data to the calldata of a regular ETH transfer, specific meanings are assigned to the transaction, thereby enabling the inscription function.

4. EVM blockchain inscription

BSC Chain, Ethereum, Polygon, and other EVM-compatible chains use a similar inscription burning method, which involves storing fixed-format text data in calldata. This approach is similar to the BRC-20 inscription format and includes information such as protocol name, operation type, token name, and quantity.

Security Risks and Precautions

1. UTXO model inscriptions (such as BRC-20, ARC-20) are prone to mistransfer or "burning": Users may mistakenly transfer or "burn" inscription assets when conducting regular BTC transfers without fully understanding the inscription mechanism, resulting in irreversible losses.

2. EVM Chain inscriptions must be handled with caution: Although EVM chain inscriptions can reduce user transaction costs, users must fully understand the protocol implementation to avoid misoperations that could lead to asset losses.

3. Differences between different protocols: There may be subtle differences in the inscription implementations among various public chains or protocols, and users should thoroughly understand the operational rules of the specific protocol.

Conclusion

The development of inscription technology has brought new possibilities to the blockchain world, but it has also brought new challenges. Users need to fully understand its principles and risks when participating in inscription-related activities, and operate cautiously to ensure asset safety. As technology continues to improve and the ecosystem gradually matures, it is believed that inscription will play a greater role in the digital asset field.