Avalanche, a prominent blockchain network, has witnessed a substantial increase in user activity related to inscription-based tokens. Over the last five days, users have paid a staggering $13.8 million in transaction fees, primarily for minting and moving these tokens.
The Rise of Inscription-Based Tokens on Avalanche
The Avalanche network experienced a notable surge in fees related to inscription transactions, reaching as high as $5.6 million per day. This trend contrasts with other blockchains like Polygon and BNB Chain, where inscription-based tokens have also been popular but incurred significantly lower fees.
Inscriptions as a Cost-Effective Alternative
Inscription-based tokens, which involve writing text in standard blockchain transactions, emerged as a workaround on Bitcoin due to its lack of native token support. They have since gained popularity on other blockchains, including Avalanche, for their relatively lower movement costs compared to native tokens.
Analysis of the Fee Surge and Market Trends
Avalanche’s recent period of inscription activity marks a significant increase compared to its previous spike in late November, which generated around $1.5 million in fees. This surge is partly attributed to an overall rise in non-inscription transactions, leading to higher demand for block space and escalating transaction costs.
Avalanche’s Position in the Inscription Market
With 61 million inscription-related transactions processed, Avalanche ranks third after BNB Chain and Polygon PoS in this market segment. The platform hosts over 1,160 inscription collections, indicating a robust and growing ecosystem.
Increased Activity Across Other Networks
Other networks like Arbitrum have also seen a rise in inscription-related activity, with around $3 million in fees spent over three days. This increase aligns with the broader trend of growing interest in inscriptions across multiple blockchains.
Diverse Participation and Validator Income
The recent spike in inscription transactions involved a significantly higher number of addresses, highlighting diverse participation in this market. While this activity generates substantial income for miners and validators on most networks, it’s noteworthy that Avalanche validators do not receive these transaction fees, as they are burned instead.
The surge in inscription-based transactions on Avalanche underscores the evolving dynamics of blockchain networks and their ecosystems. As users increasingly explore cost-effective alternatives for token transactions, networks like Avalanche are experiencing significant shifts in activity and fee structures. This trend not only reflects the adaptability of blockchain technology but also its potential to cater to diverse user needs in the digital asset landscape.
