# 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:**&#x20;

1. Inscription size of RefundTx is largely depended on number of accounts in the system = number of refund outputs.&#x20;
2. Every refund output in the refundTx adds \~30vbytes
3. The size of the compressed refundTx can change based on ratio of compression.&#x20;
4. The 4 byte identifier reduces the output size by 26 bytes per address.&#x20;
5. 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.&#x20;
6. This document assumes a bull case for Bitcoin. Assumptions may be different for a bear case.&#x20;

**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&#x20;

| 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.&#x20;

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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