The smart transformer (ST) is a power electronics-based transformer that serves as an energy router and provides various ancillary services in the electrical distribution grid. However, an ST-based microgrid has limited inertia, leading to frequency instability, sustained voltage oscillations, and synchronization problems during disturbances such as load changes, line switching, generation loss, etc. In this article, a new virtual inertia control is proposed for the ST low-voltage (LV) converter and distributed generation (DG) converters. The proposed adaptive decentralized virtual inertia-virtual oscillator (VI-VO) control for ST-based microgrids provides frequency containment reserve (FCR) services and offers fast dynamic response with time-domain implementation. It further enables accurate power sharing among converters, improves frequency characteristics, ensures stable operation under varying operating conditions, and eliminates the need for phase-locked loop (PLL). In addition, the proposed controller allows the ST LV converter to support frequency restoration reserve (FRR) service in the microgrid. The eigenvalue analysis demonstrates the small-signal stability of the proposed system. The simulation and experimental results are shown to verify the performance of the proposed virtual inertia synthesis.