Ethscriptions Devs Propose A New Protocol Preventing NFTs From Scam

Updated: 19 July 2023

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Tom Lehman, the co-founder, the former chief executive officer at Genius.com and one of the persons behind the new Ethscriptions non-fungible tokens, has proposed to change the Ethscriptions protocol to prevent a future wide variety of marketplace exploits, including the ethscriptions .com exploit.

Lehman Proposes Ethscriptions Protocol Change

In a July 19 blog post, Tom Lehman, the renowned Ethscriptions protocol developer, popularly known on Twitter as Middlemarch, confirmed readiness to change the initial Ethscriptions protocol to a safer protocol. The new protocol aimed at boosting security in marketplaces.

ESIP-2: Safe, Trustless Smart Contract Ethscription Escrow

In this ESIP, we propose a change to the Ethscriptions Protocol that will prevent a wide variety of marketplace exploits, including the ethscriptions .com exploit.https://t.co/zpP8fUvTnO

— Middlemarch.eth (@dumbnamenumbers) July 18, 2023

Launched last month, Ethscriptions is a novel way to create Ethereum assets that leverage transaction “calldata” to write non-financial data to the network’s blockchain. Ethscriptions provide a new way to create image-based NFTs on the Ethereum blockchain, taking inspiration from the emergence of Bitcoin Ordinals.

Since its inception, Ethscriptions has gained massive adoption among collectors and investors. Like other non-fungible token ecosystems, the Ethscriptions ecosystem has also become vulnerable to scams and hacks. This menace has pushed its developers to think of protocol change.

Ethscriptions Suffers Smart Contract Exploit

Ethscriptions protocol change proposal appeared a few days after the Ethscriptions market platform suffered one of the largest exploits in the short history of NFTs. The recent hack impacted about 123 individual addresses, with hackers disappearing with about 202 Ethscriptions.

https://t.co/ZcR9HKlexS Marketplace Security Incident Update

In this Tweet I’m going to walk you through how the exploit happened and what we are doing about it.

First, to be clear, this was not a vulnerability in the Ethscriptions Protocol. This was a vulnerability in one… pic.twitter.com/i5Q0W2PRMQ

— Middlemarch.eth (@dumbnamenumbers) July 12, 2023

In terms of value, it’s unclear exactly how much was lost in connection with the exploit. But, according to OpenSea, some Ethscriptions have sold for as much as 5 ETH or around $9,600 in the past month. While commenting about the recent exploit, Lehman remarked:

“About 123 individual addresses lost a total of about 202 ethscriptions in this exploit. The purpose of the marketplace was basically to help show other people how to create marketplaces and help build an ecosystem. Unfortunately, we fell on our face in that area.”

Ethscriptions Protocol “ESIP-2” Overview

ESIP-2 is a new enhancement Ethscriptions Protocol that enables smart contracts to safely and trustlessly escrow Ethscriptions. ESIP-2 accomplishes its mission by offering a mechanism for conditional transfers, relieving contracts from the requirement to identify the depositor of a given Ethscription. Lehman believes the new protocol will massively deter potential NFT scams.