Over the weekend, blockchain networks experienced a remarkable surge in transaction fees, driven by the fervor surrounding Ordinals inscriptions. Notably, this surge wasn’t confined to the Bitcoin network; Ethereum Virtual Machine (EVM) chains also bore the brunt of heightened demand for block space, resulting in a pronounced spike in gas fees.
EVM subscriptions reached $8.3 million
On December 16, the total spent on inscriptions reached an unprecedented $8.3 million, according to data from Dune Analytics. Leading the charge in gas expenditure was the Avalanche network, which saw a staggering $5.6 million spent on inscriptions on that single day. Arbitrum One followed closely behind, with $2.1 million allocated to gas fees for inscriptions. Within the past 24 hours, a significant portion of network gas fees—58% on Avalanche and 48% on zkSync Era—was dedicated to EVM inscriptions.
BNB Chain also felt the impact, with 73% of its transactions in the same period earmarked for inscriptions. The severity of the situation was particularly evident on the Arbitrum One network, causing a noteworthy 78-minute outage on December 15. Similar to the Ordinals trend observed on the Bitcoin network, EVM inscriptions involve embedding information in transaction call data to generate unique nonfungible tokens (NFTs) directly on the blockchain.
While much attention has been directed at EVM chains, the Bitcoin network has not been immune to this surge in inscriptions. This uptick in activity has contributed to an increased demand for block space, resulting in elevated transaction fees. Presently, there are almost 280,000 unconfirmed transactions, and transaction fees have soared to as high as $37. Observers note that such exorbitant fees render the utilization of the Bitcoin network for its intended purpose—peer-to-peer digital transactions—impractical for many users.
Market response and NFT market dynamics
Bitcoin luminary and cryptographer Adam Back weighed in on the situation, emphasizing that the Ordinals are a force that cannot be stopped. Furthermore, he suggested that the resultant high fees play a pivotal role in fostering the adoption of layer-2 solutions and driving innovation within the broader cryptocurrency ecosystem. On December 18, an NFT and Ordinals expert known as “Leonidas” shed light on the extraordinary performance of a single collection.
This collection surpassed the combined trading volume of renowned NFT collections, including CryptoPunks, Bored Ape Yacht Club (BAYC), Mutant Ape Yacht Club (MAYC), Pudgy Penguins, Azuki, DeGods, Moonbirds, Doodles, and Meebits in the preceding 24 hours. Notably, the Bitcoin Frogs Ordinals collection emerged as the market leader with a capitalization of $182 million. Secondary sales for this collection surged to $4.8 million on December 17, according to data from CryptoSlam.
The weekend witnessed an extraordinary surge in network transaction fees across various blockchains, fueled by the escalating demand for block space driven by the Ordinals inscriptions trend. EVM chains, including Avalanche and Arbitrum One, experienced significant spikes in gas fees, leading to operational challenges and, in some cases, temporary outages. The impact was not confined to altcoins, as Bitcoin faced increased fees and unconfirmed transactions, prompting discussions on the role of high fees in stimulating innovation and the adoption of layer-2 solutions within the cryptocurrency space.
