The Ethereum network has witnessed a surge in daily gas spending and EVM inscriptions as a result of the growing popularity of Ordinals, a new NFT project that claims to be the “first on-chain generative art”. Ordinals are unique digital artworks that are minted and stored entirely on the Ethereum blockchain, without relying on any external servers or platforms.
Ordinals are a collection of 10,000 algorithmically generated NFTs that are inspired by the mathematical concept of ordinal numbers, which are used to describe the order or rank of elements in a set. Each Ordinal has a distinctive visual appearance and a numerical value that represents its position in the series. The lower the value, the rarer and more valuable the Ordinal.
Ordinals are created by a smart contract that uses a combination of randomness, cryptography, and user input to produce the final output. The smart contract also encodes the image data of each Ordinal as a hexadecimal string and stores it on the blockchain, making Ordinals fully decentralized and immutable.
Ordinals have attracted a lot of attention and demand from NFT collectors and enthusiasts, who appreciate the artistic and technical innovation behind the project. According to the Ordinals website, the project has sold out all 10,000 pieces in less than a week, generating over 40,000 ETH (around $64 million) in sales. Some Ordinals have been resold for as high as 1,000 ETH (around $1.6 million) on secondary markets such as OpenSea.
How do Ordinals affect the Ethereum network?
The creation and transfer of Ordinals require a lot of computational power and storage space, which translates into high gas fees on the Ethereum network. Gas fees are the payments that users make to the network validators, or miners, for processing their transactions. The higher the gas fee, the faster the transaction is confirmed.
According to Etherscan, a blockchain data explorer, the daily gas spending on the Ethereum network has reached a record high of 141.6 billion on Dec. 17, 2023, surpassing the previous peak of 113.5 billion on May 12, 2023. The average gas fee has also increased to 0.0026 ETH (around $4.16) per transaction, which is more than four times higher than the average of 0.0006 ETH (around $0.96) in November 2023.
Another indicator of the impact of Ordinals on the Ethereum network is the number of EVM inscriptions, which are the transactions that store data on the blockchain. According to Dune Analytics, a blockchain analytics platform, the number of EVM inscriptions has surged to over 16,000 on Dec. 17, 2023, accounting for more than 10% of all transactions on the network. This is a significant increase from the average of around 2,000 EVM inscriptions per day in the previous months.
What are the implications and challenges of Ordinals?
Ordinals represent a new frontier in the NFT space, as they demonstrate the potential and possibilities of on-chain generative art. By eliminating the need for any external dependencies, Ordinals offer a high level of security, permanence, and authenticity for their owners and creators. Ordinals also showcase the expressive and creative power of the Ethereum network, as they use the blockchain as both a medium and a canvas for art.
However, Ordinals also pose some challenges and trade-offs for the Ethereum network and its users. The high gas fees and network congestion caused by Ordinals may deter or exclude some users from participating in the network, especially those who are not interested in or able to afford NFTs. The high gas fees may also affect the development and adoption of other applications and use cases on the network, such as DeFi, gaming, and social media. Moreover, the high gas fees and EVM inscriptions may have environmental and ethical implications, as they increase the energy consumption and carbon footprint of the network.
The Ordinals craze may also raise some questions and debates about the value and meaning of art and NFTs. Some critics may argue that Ordinals are not real art, but rather a gimmick or a speculation tool that exploits the hype and scarcity of NFTs. Some may also question the originality and creativity of Ordinals, as they are generated by a predefined algorithm and not by a human artist. On the other hand, some supporters may defend Ordinals as a legitimate and innovative form of art, that challenges the conventional notions and boundaries of art and NFTs.