Leading Ethereum-based project ETHS launches virtual machine, innovation seems to return to its origins.

ETHS, a leading Ethereum-based project, launches a virtual machine, bringing innovation back to its roots.

Author: Loopy Lu

Today, Tom Lehman (alias Middlemarch), the creator of the Ethscriptions protocol, announced on Twitter that the ESC VM of Ethereum Scripting has officially launched after testing on Goerli.

After experiencing a series of events such as market theft, surging prices of scripts, and speculation, where will the “retro-style” ETHS go? What new features does the newly launched ESC VM have, and how will it “empower” ETHS? Odaily Star Daily will start with the origin of ETHS and tell you a story of replicating Bitcoin scripts on ETH.

ETHS: Ordinals on Ethereum

In early July, Tom Lehman launched the Ethscriptions protocol, which is also known as ETHS in the Chinese world. Tom Lehman was formerly a co-founder of Capsule 21, CEO and co-founder of Genius.

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What makes this project interesting is that in our impression, technology seems to be evolving towards a more “advanced” direction. Supporting more general-purpose computing, achieving more complex functions, and executing more complex smart contracts seem to be the “direction” of development in the crypto world. However, ETHS has a “back to basics” quality.

Similar to the popular Bitcoin scripts (Ordinals) before, ETHS also introduces a new method of writing data onto the chain. Specifically, in Ethereum transactions, calldata is an “annotation field”. For example, after an attack event, the commonly seen on-chain “messaging chat” is usually based on this field. When interacting with smart contracts, this field is also used to pass information to the smart contract.

ETHS is similar to NFT but also different. The product uses the calldata field of Ethereum transactions to store data, and ETHS is much cheaper than NFT. The project team stated that the cost is 40 times cheaper than NFT. Such a large difference is because NFT uses expensive smart contracts, while ETHS does not.

In the design of ETHS, they store the data that needs to be stored (like NFT) in this field. Users use tools like hexhero to convert URI data (Uniform Resource Identifier) into hexadecimal format. Then, they initiate a transaction on the chain and store the hexadecimal data in the calldata field, which can achieve the storage of data on the chain in a disguised manner.

Thus, a “script” on the Ethereum network is born. Currently, ETHS has a maximum file size limit of about 90 KB and does not require a smart contract.

Launching VM, adding “intelligence” to “non-smart”?

On July 17th, shortly after its birth, ETHS faced its first major test. The market of ETHS, Ethscriptions.com, was hacked, and a large number of listed scripts were stolen. In this attack, approximately 123 individual addresses lost a total of about 202 Ethscriptions. Previously, ETHS had already experienced a surge, with the price of individual Ethscriptions reaching 5 ETH at one point.

This vulnerability can be traced back to a smart contract created by two co-founders, which included a small piece of code that allowed people to withdraw Ethscriptions from the market that did not belong to them.

However, this issue was subsequently resolved. The founders have stated that they have contacted many users affected by this vulnerability.

On July 25th, Ethscriptions V2 was officially launched. In addition, a new protocol called ESIP-2 for the Ethereum subscription market was introduced.

The launch of the new market has once again ignited the trading enthusiasm for ETHS. According to OpenSea data, the total trading volume has reached 638 ETH so far.

And today, the testnet of ESC VM went live, taking ETHS on a new trajectory.

In the ESIP-4 proposal, Ethereum Inscriptions introduced the virtual machine. This is a new protocol built on top of Ethscriptions. ESC VM gives ETHS computational capabilities. ETHS also introduces a contract system called “Dumb Contracts” that users can interact with through Inscriptions.

It should be noted that the so-called “Dumb Contracts,” as the name implies, are not true smart contracts, and ESC VM is not a true virtual machine.

ESC VM provides a similar environment to EVM for “Dumb Contracts.” Dumb Contracts can execute two commands: deployment (create new contracts) and invocation (call existing contract state-changing functions).

The interaction of these contracts is a somewhat special way of interaction. Because they are stored through Inscriptions, they bypass the execution and storage costs of EVM. This also allows Dumb Contracts to have much lower costs than smart contracts. However, it is precisely because of this that these contracts are not universal and cannot achieve complex on-chain computations like a true virtual machine.

How can ESC VM be understood more simply? In the official documentation, it is explained very concisely—BRC-20 is a groundbreaking technology, and the goal of ESC VM is to improve on BRC-20. ESC VM attempts to make fundamental improvements to BRC-20 (although the official documentation does not specify which improvements are “fundamental”).

Currently, the deployed ESC VM on the testnet can already achieve basic DEX functionality.

“We are playing with something very new”

There is no doubt that the popularity of BRC-20 has inspired ETHS, and the official documentation of ETHS is also full of praise for BRC-20.

In addition, the high centralization of the NFT market is also one of the main reasons for the birth of ETHS. The team openly admits in the documentation that in the current NFT market, there is a high degree of centralization in both NFT image storage and NFT sales. Just think about how many pseudo NFTs you have collected that have lost their images? And the sales process is even more terrifying.

The fair launch of BRC-20 solved the problem of team centralization. And this also inspired the birth of ETHS.

When Bitcoin Script appeared, the meme market cheered. This is a “genuine” meme product, where users can “mint” tokens on the truly decentralized Layer 1 network of BTC, with no reserved tokens or inflation. The original Script (rather than smart contracts) has achieved “decentralization” that even advanced public chains are struggling to achieve.

ETHS also has the same characteristics. The team behind ETHS believes that this protocol completely changes the NFT landscape and provides a new solution for fully decentralized on-chain storage. They believe that “this may open up new creative expressions and redefine how we perceive digital assets in the future.”

But before being captivated by its fascinating narrative, let’s go back to the beginning – do you still remember the fully decentralized Bitcoin?

When people got tired of the non-smart contract and “outdated” BTC network, ETH was born. When people found that smart contracts made everything so complex, they returned to the BTC network in search of the original decentralization: trading the “smart” BRC on a non-smart contract network, trading the “not-so-smart” Script on a smart enough EVM network, implementing semi-smart dumb contracts on ETHS that pretends to be not smart… As Mark Twain said: history doesn’t repeat itself, but it does rhyme.

When will this never-ending game of “pretending” innovation come to an end?

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