What is Calldata?

In Ethereum transactions, the call data field serves as a "notes field," akin to the notes section you might find when sending a traditional bank transfer. While this field is often left empty when simply sending ETH to another user, it plays a crucial role in interactions with smart contracts. When engaging with a smart contract, the call data field is used to specify the function you want to execute and any necessary parameters.

The Inscription protocol leverages this call data field to store inscriptions, which are then interpreted and processed using a specially developed indexer software. This innovative approach enables a variety of computations and asset interactions without the need for traditional smart contract deployment, resulting in significantly reduced fees.