Inscription Estimates
To guarantee the safety of user funds, a watchtower/validator inscribes the state difference to bitcoin as a refundTx to safeguard user funds in case of liveness failure. This ensure the data availability of refund is guaranteed by the bitcoin blocks itself, ie. It uses bitcoin as a data availability layer to commit state difference transaction.
Some points to consider:
Inscription size of RefundTx is largely depended on number of accounts in the system = number of refund outputs.
Every refund output in the refundTx adds ~30vbytes
The size of the compressed refundTx can change based on ratio of compression.
The 4 byte identifier reduces the output size by 26 bytes per address.
Estimated fees in USD changes with BTC price and network fee rate. Calculations below assumes 36 sats/byte for the calculations. BTC/USD price and current fee rate in the network are variable parameters and will change fee in USD numbers.
This document assumes a bull case for Bitcoin. Assumptions may be different for a bear case.
What we don’t consider:
1. Consuming more than half the block space by other L2 projects will create fee pressure in the system, leading to much higher sats/byte
| Number of refund Output | Inscription Size (vBytes) | Fee in Sats @ 36 sats/byte | Fee in USD @ BTC = ~$65,500 | Inscription Size (bytes) with 4 byte identifier | Fee in Sats with 4 byte identifier @ 36 sats/byte | Fee in USD with 4 byte identifier @ BTC = ~$65,500 | Fees in USD with 4 byte identifier @ BTC = $100,000 , 36 sats/byte | Fees in USD with 4 byte identifier @ BTC = $100,000, 50 sats/byte |
|---|---|---|---|---|---|---|---|---|
1 | 600 | 21600 | 14 | 585 | 21060 | 14 | 21 | 29 |
100 | 2760 | 99360 | 65 | 2748 | 98938 | 53 | 99 | 137 |
250 | 6015 | 216540 | 142 | 4768 | 171648 | 113 | 171 | 239 |
500 | 12015 | 432540 | 284 | 8970 | 322920 | 212 | 323 | 448 |
750 | 18866 | 679176 | 445 | 13170 | 474120 | 311 | 474 | 658 |
1000 | 24291 | 874476 | 572 | 17370 | 625320 | 411 | 625 | 868 |
For ~ 100 bitcoin blocks a day, we assume 100 inscriptions committing a state difference.
Per day cost of inscriptions for 100 inscriptions a day ~ $ 411 * 100 = $41,100
Per month cost if BTC/USD price remains the same = $41,100 *30 = $1,233,000
6 month estimate if price remains the same = $7,398,000
6 month estimate with BTC @ $100k and fee rate @ 36 sats/byte = $11,255,760
6 month estimate if fee rate rises to 50 sats/byte with BTC @100k = $15,633,000
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