Rather than forcing all transactions to destroy/spend all inputs as is the norm in historic UTXO-based Blockchains, what if we instead brought in the concept of "read-only inputs"? These would allow any transaction to reference any other box (UTXO) currently in the UTXO-set and read the data held in it without any of the problems normally inherent in eUTXO.
This is exactly what data inputs are.
No smart contract execution occurs because the box is not being destroyed/spent. This means that a given UTXO can be read by every single tx in a block/slot in parallel as none consume the data, but all share a reference to it. Transaction fees decrease due to no contract execution and no extra output needing to be created. All further negatives are also addressed, making data inputs a clear design choice that all UTXO-based blockchains should implement.
Data inputs are unique to Ergo and not yet present in other extended-UTXO systems. Multiple transactions can share a data-input box, which will store only a single reference to the box in the block.
We can also spend a data-input box in the same transaction as long as it existed before the transaction was applied. As an example, the box with the id.
It was used as both an input and a data input in this transaction.
While the use of data inputs may not be immediately apparent, they play a major role in making Ergo more friendly to DeFi applications where we want to refer to a box without needing (or have the ability) to spend it, such as in decentralized order-books (DEX).
For instance, the above transaction used a "timestamping service" to timestamp a box provided as data input.
A script in Ergo can refer to other boxes in the transaction. For instance, the code snippet
INPUTS(0).value > 10000 && OUTPUTS(1).value > 20000 in any of the inputs boxes would enforce that the first input and the second output boxes must have a value greater than
For a comparison between the logic used in eUTXO and account-based models, please see Off Chain Logic & eUTXO and a model transaction
See this introductory article, Unlocking The Potential Of The UTXO Model for more information. There are also forum posts with more information; Building A Portable And Reusable (PaR) UTXO dApp Standard and Data Inputs Semantics