Solana Inscriptions cross $1 mln: Will SOL reap the benefits?

Journalist

Posted: December 19, 2023

• A whopping 287,000 inscriptions were minted on the 16th of December.
• SOL accrues value from transaction fees, as 50% of the revenue is burned.

Blockchains across the industry were witnessing an explosion of inscriptions in the dying stages of 2023.

Whether it’s Bitcoin [BTC], Ethereum [ETH] Virtual Machine (EVM)-compatible networks or non-EVM chains, inscriptions continue to boost demand for the blockspace.

Inscriptions on Solana jump past a million

Solana [SOL], one of the most popular smart contracts blockchain, wasn’t insulated from the frenzy. According to AMBCrypto’s analysis of Flipside’s statistics, the total cumulative Inscriptions count hit 1 million on the 17th of December.

Source: Flipside

The activity exploded during the weekend, with a whopping 287,000 inscriptions minted on a single day on the 16th of December.

To get a sense of the madness, more Inscriptions were created in the last three days than all the ones created before that.

Moreover, the number of creators also surged past 50,000 as of the 17th of December. The fascinating aspect was that more than 15,000 were new entrants to the market.

Source: Flipside

Similar to Bitcoin Ordinals, Inscriptions work by embedding images or other data directly on the chain. They can be used to create unique digital assets like non-fungible tokens (NFTs) and even decentralized applications (dApps).

Solana, too, was quick to board the bandwagon. Drawing inspiration from Bitcoin’s famous BRC-20s, Solana launched its token standard — SPL-20.

The inscriptions commenced on the 16th of November and over the next two days, more than 66,000 SLP-20s were inscribed on the network.

High fee revenue for Solana in December

Meanwhile, AMBCrypto analyzed Token Terminal data and noticed a 77% hike in monthly fees on the Solana network.

The month of December was particularly profitable, with daily fees climbing to a year-to-date (YTD) peak of nearly $300,000 on the 14th of December. It is not, however, certain that inscriptions were the main drivers of the fee hike.

The daily active user base also rose significantly, marking a monthly increase of 38.9%.

Source: Token Terminal

What next for SOL?

Note that Solana burns 50% of its fee revenue. This means that more the fees collected, more will be the deflationary pressure on native token SOL.

How much are 1,10,100 SOLs worth today?

SOL was one of the top performers in the market lately, growing 23.18% over the last 30 days, as per CoinMarketCap.

Since the asset accrues value from network activity, SOL holders might be keenly tracking the growth of inscriptions to make informed decisions regarding their investments.