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Roughly two weeks after launch, Ripple’s Ethereum-compatible sidechain shows signs of fading on-chain engagement, especially when compared to the surge seen on day one. As of July 14, over 1,300 smart contracts have been deployed on the XRPL EVM via infrastructure provider Peersyst. The network has processed more than 17,000 transactions and facilitated over 1,500 XRP transfers, per data from the XRPL EVM explorer. More than 120 tokens have also been issued, and bridged assets include stablecoins from multiple protocols, as well as real-world asset (RWA) tokens from Midas and Falcon Stable, DWF Labs’ synthetic stablecoin that depegged in early July amid concerns over collateral and yield. To continue reading this as well as other DeFi and Web3 news, visit us at thedefiant.io

preface "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks."  ——This sentence, engraved in the Bitcoin genesis block, witnesses the beginning of an era. And now, as Bitcoin hits new highs, we're witnessing the end of another once-glorious era – inscriptions and runes From the emergence of the Ordinals protocol in early 2023, to the crazy hype of BRC20, to the emergence of protocols such as Runes, Atomical, CAT 20, RGB++, and Alkanes, the Bitcoin ecosystem has experienced an unprecedented "inscription revolution". They are all trying to make Bitcoin from a mere store of value to an underlying platform that can host various asset protocols. However, when the revelry dissipates and the background gradually emerges, we have to face a cruel reality: the fundamental limitations of the inscription agreement are destined for this beautiful tulip bubble. As a practitioner who is deeply involved in the development of inscription protocols from a technical point of view, and has rubbed the underlying implementation of each protocol, the author has witnessed the emergence of this ecology from the germination to the explosion, and then to the return of rationality today. This article will discuss the innovation and limitations of connecting multiple inscription protocols to why this once unique track has quickly moved towards the end of the current one. 1. The evolutionary chain of the inscription agreement 1.1. The Ordinals Agreement: The Beginning of the Age of Inscriptions The first key to the "Age of Inscriptions" of Bitcoin. By numbering each satoshis and using the submission to reveal the technical principle, the on-chain storage of arbitrary data is realized. The combination of the UTXO model and the NFT concept uses the serial number of Satoshi's birth as a positioning identifier, so that each Satoshi can carry unique content. For details, see: Interpreting the Oridinals Protocol and the BRC20 Standard Principles, Innovations, and Limitations From a technical point of view, Ordinals has an elegant design that is perfectly compatible with Bitcoin's native model, enabling permanent storage of data. However, just writing data is also its limitation, and it cannot meet the strong desire of the market at that time for the core demand of BTC+ other assets "issuance". 1.2. BRC20 Protocol: Business Breakthrough and Consensus Trap Building on the technology laid by Ordinals, BRC20 breathes soul into on-chain data through a standardized content format – bringing otherwise static inscriptions to life. It defines the complete asset life cycle of deploy-mint-transfer, transforms abstract data into tradable assets, and realizes the issuance of fungible tokens on Bitcoin for the first time, satisfying the market's rigid demand for "issuance" and detonating the entire inscription ecology. However, there is a fundamental conflict between its account model and Bitcoin's UTXO model, and users must first inscribe the transfer inscription before making the actual transfer, resulting in multiple transactions to complete a single transfer. What's more, the fundamental flaw of BRC20 is that it simply binds "certain data" without sharing its consensus power at all. Once the off-chain indexer is discontinued, all so-called "assets" will instantly become meaningless garbage data. This vulnerability is exposed in repeated satoshi incidents – when multiple assets appear on the same satosashi, the protocol parties collectively modify the criteria, meaning that the consensus of the entire ecosystem is effectively in the hands of the minority. What's even more confusing is that the subsequent "optimizations" such as single-step transfer launched by relevant institutions have not actually touched the core pain points of the market, but have brought the cost of each platform to migrate and adapt to the new version. This reflects a deeper problem: for two years, the designers of the inscription protocol have been stuck in the single domain of "issuance", and have not thought deeply about the application scenarios after issuance. 1.3. Atomical Protocol: Correction and Disconnection of UTXO Originalism In response to BRC20's UTXO compatibility problem, Atomical proposed a more radical solution: let the number of assets directly correspond to the number of satoshis in the UTXO, and introduce a proof-of-work mechanism to ensure fair minting. It is natively compatible with the Bitcoin UTXO model, and the transfer of assets is the transfer of satosos, which solves the cost and interaction problems of BRC20 to a certain extent. However, the iteration of technology has also come at the cost of complexity – the transfer rules have become extremely complex, requiring precise calculations for the splitting and merging of UTXOs, and asset burns at every turn, making inscription players afraid to manipulate them lightly. What's more fatal is that the proof-of-work mechanism has exposed serious fairness problems in actual operation, and large households take the lead in completing the casting with their computing power advantages, which is completely contrary to the mainstream narrative of "fair launch" of the inscription ecology at that time. The subsequent product iterations reflect the development team's misunderstanding of user needs - complex functions such as semi-dyed assets consume a lot of manpower and material resources, but have little improvement in the user experience, which leads to the high cost of refactoring on-chain tools for major organizations. The long-awaited AVM was long overdue, and the entire market had already turned, missing the best window for development. 1.4. Runes Protocol: Elegant compromise and application gap of official authority As the "official" distribution agreement for Ordinals founder Casey, Runes has absorbed the lessons learned from the aforementioned protocol. The adoption of OP_RETURN data storage avoids witness data misuse, and a balance between technical complexity and user experience is found through clever coding design and UTXO models. Compared to the previous protocol, Runes' data storage is more straightforward, encoding is more efficient, and transaction costs are significantly reduced. For details, please see: BTC halving is imminent, interpreting the underlying design mechanism and limitations of the Runes protocol However, the Runes protocol also falls into a fundamental dilemma in the inscription ecology - the system is not designed in any way other than to issue coins. Why does the market need a token that can be obtained without any barrier to entry? After acquiring it, what is the practical point other than selling it in the secondary market? This purely speculative-driven model dooms the protocol to a limited vitality. But the application of opreturn opens up the idea of a follow-up protocol. 1.5. CAT 20 protocol: the ambition of on-chain verification compromises with reality He did achieve true on-chain verification through Bitcoin Script. Only state hashes are stored on-chain, and recursive scripting ensures that all transactions follow the same constraints, thus claiming "no indexer required". This is the long-standing holy grail of the Inscription Agreement However, CAT 20's "on-chain validation". Although the verification logic is indeed executed on-chain, the state data that can verify it is stored in the OP_RETURN form in the form of a hash, and only the hash cannot be reversed, so in practice, an off-chain indexer is still required to maintain a readable state. By design, the protocol allows token names to be non-unique, resulting in confusion for assets with the same name, and the UTXO scramble problem in high-concurrency scenarios in the early development makes the initial minting experience extremely poor for users. Later, with the hacker attack, the underlying principle is that the internal data is connected to calculate the two values, the lack of split symbols, resulting in 1 and 234 and 12 and 34 two values, can calculate the same hash result, the attack led to the agreement upgrade, but the long-delayed upgrade scheme has made the market forget the original enthusiasm. The case of CAT 20 shows that even if a partial breakthrough is achieved at the technical level, it should not be too advanced, and if it completely breaks through the user's understanding, it will be difficult to gain market acceptance. And the threat of hackers is always to hang the sword of Damocles over the head of the project party, telling everyone to be in awe. 1.6. RGB++ Protocol: Technological Idealism and Ecological Dilemma CKB uses a homogeneous binding scheme to try to solve the problem of Bitcoin's functional limitations through a dual-chain architecture. Using CKB's Turing completeness to verify Bitcoin UTXO transactions, it is the most technologically advanced, realizes smart contract verification in a richer sense, and has the most complete technical architecture, which can be regarded as the "technical pearl" in the inscription protocol. However, the gap between the ideal and the reality is vividly reflected here - the complexity of the dual-chain architecture, the high learning cost and the threshold for institutional access. What's more, the project team itself is relatively weak, and it has to promote the dual challenges of the chain (CKB) and the new protocol (RGB++) at the same time, which cannot attract enough market attention. In this field, which is highly dependent on network effects and community consensus, it has become a technical solution that is "popular but not popular". 1.7 Alkanes Protocol: The Final Sprint and Lack of Resources The smart contract protocol based on off-chain index+ integrates the design concepts of Ordinals and Runes, trying to implement arbitrary smart contract functions on Bitcoin. It represents the last sprint of the inscription protocol to the traditional smart contract platform. It is indeed theoretically possible to implement arbitrarily complex contract logic. And he also took the opportunity of the BTC upgrade to remove the 80-byte opreturn limit. However, the realistic cost considerations ruthlessly break this technical ideal, not to mention the complex contract operation under the chain, bringing huge performance bottlenecks, even if the self-built indexer in the early stage of the project has been blown up many times, and the deployment of custom contracts requires nearly 100 KB of data on the chain, the cost far exceeds the cost of traditional public chain deployment, and the contract operation is not controlled, still relying on indexer consensus, the high cost is destined to only serve a very small number of high-value scenarios, and the high value does not trust the general indexer, even if there is unisat Strong side, but the market does not pay the bill, if it was proposed 1 year ago, it may be completely different at the right time and place. 2. The fundamental dilemma: Bitcoin's minimalist philosophy and overdesign Cumulative effects of technical debt The evolution of these protocols presents a clear but contradictory logic: each new protocol attempts to solve the problems of its predecessors, but introduces new complexities while solving them. From the elegance and simplicity of Ordinals to the technical stuffing of subsequent protocols, the complexity is constantly increasing in order to be different, until every player has to learn a bunch of terms and constantly watch out for risks. And all the attention is only on the logic of the coin issuing platform, so why don't players choose a place with lower cost, easier control, more significant pull, and better platform mechanism? Chewing on the same topic for a long time has also brought about the aesthetic fatigue of users. A vicious circle of scarce resources The root cause of the lack of resources of these projects may lie in the centralization and fair launch of Bitcoin itself - how can institutions that lack incentives overinvest in platforms that do not have an advantage? Compared with the miners' block income, the operation of the indexer is a pure cost, and there is no one to solve the technical and operational problems without the distribution of the "miner" income. Speculative demand vs real demand In many user educations, it has been found that as long as they are off-chain protocols, their security is not equal to the consensus of Bitcoin. The cooling of the market is not accidental, but reflects the fundamental problem of the inscription agreements: they solve not real needs, but speculative ones. In contrast, the truly successful blockchain protocols are all because they solve practical problems: consensus, functionality, and performance are all indispensable, but the contribution of inscription protocols in this regard is almost zero, which explains why their popularity is not sustainable. 3. The transformation of the era on the occasion of RWA: from market dream rate to market share Maturity of market perception As the market matures, users have learned to cherish their attention after several rounds of bull and bear baptisms - what a valuable resource. They no longer simply listen to information sources monopolized by Twitter KOLs and the discourse community, and they are no longer the "consensus cannon fodder" of superstitious white papers. The threshold for the issuance platform is low, and in the current market environment, this "low-hanging fruit" has been picked. The industry is shifting from pure token issuance to more practical application scenarios. But it's worth noting that if there is only a bunch of distribution platforms in the RWA space, then this wave of opportunities will be fast and fast. The return of value creation Technological innovation in the era of inscription protocols is often tinged with "showmanship", pursuing technical ingenuity rather than practicality. The development logic of the new era has shifted from "market dream rate" to "market share", and more attention is paid to forming a real network effect through user word-of-mouth. The real opportunity belongs to those teams who are looking for product-market fit – to make products that truly meet the needs of users, have cash flow, and have a business model. Conclusion: The Return of Reason and Restraint In the early days, once everything is in the macro perspective, it will eventually be right and just. After calming down, the explorations and setbacks of the inscription era also provide valuable lessons for the healthy development of the entire industry. When the price of Bitcoin hits new highs, we have reason to be proud of this great technological innovation. But we should also recognize that technology has its own internal laws, not all innovations will succeed, and not all bubbles will be worthless. The rise and fall of the inscription agreement, it tells us that technological innovation must be built on a solid technical foundation and real market demand, speculative enthusiasm and excessive technical show-off, but anything that does not meet the current market conditions (the cognition of the institution and the understanding of the player), will lead to a flash in the pan, chasing hot projects may have a voice, but the project to create hot spots can live for a long time. In this fast-changing industry, it's more important to be rational and restrained as a builder than to chase hot spots and make hasty releases. Moreover, the market actually does not have so much patience, waiting for you to polish and iterate, many traditional Internet strategies of small steps and fast running are not implemented, and the first battle is a decisive battle. As I wrote in an article two years ago: "BRC-20 and Ordinals NFTs have brought a lot of controversy to Bitcoin... Although the new thing is explosive in price, its technical shortcomings are also very significant: too centralized, lack of trusted verification mechanism, limited performance of the Bitcoin network, lack of infrastructure, and lack of security. " "Although I am not optimistic about Ordinals in front of him, after all, his application of the blockchain space is still too monotonous... But as an interesting attempt, such a breakthrough innovation can also re-arouse everyone's thinking. " History proves the importance of maintaining rational thinking. The end of the era of inscriptions is not a failure, but a growth. It shows us the way forward and provides valuable lessons for those who come after us. In this sense, the historical value of the inscription protocol will exist for a long time and become an important page in the history of blockchain technology.

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$PIN looks like an interesting coin to me for mid term @PinLinkAi is positioning itself as a top infrastructure protocol, leveraging and advancing three hot trends: RWA, DePIN, and BTCFi. Soon they will also launch Pinance - an aerodrome like product for RWA assets in ethereum mainnet. Pinlink is tokenizing real-world infrastructure like mining fleets, AI compute, and validator nodes, generating real BTC yield that drives $PIN buybacks. Market cap wise, this coin is much lower than other major RWA projects. They have more products lined up set for release in the next few months. Disclaimer: I invested in this project.