The BTC ecosystem has sounded the clarion call for a new round of bull market. What did Inscription do right?
The way to start a new round of bull market is that new issuance mechanism, trading mechanism and market making mechanism bring in stupid money. Whether it is Inscription or Friendtech, they all confirm this view - don't be swayed by technology, narrative and orthodoxy. The essence of the currency circle is assets, which is related to chip distribution, holding cost, transaction cost and market making cost. Maybe you still look down on Inscription and think it is a step backward. But it is undeniable that the horn of a new round of market was blown by the BTC ecosystem.
What did Inscription do right?
1. Use existing consensus: BTC consensus is the strongest consensus in crypto and has nothing to do with technological development, so there is no need to prove anything. Building a product based on an existing strong consensus is several orders of magnitude easier than building a product and then looking for consensus.
2. Fair launch meme maximization: Every asset has a meme attribute. If a meme is the sum of a project's technology, narrative, price, team, cultural background, and events, then the fair launch is the most popular in the secondary market, no doubt about it. From the POW era to ICO and DeFi, retail investors' pursuit of a coinage distribution system with equal participation opportunities (at least theoretically fair) has never changed. Compared with Friendtech and ETH Dog, Inscription has achieved the ultimate in this regard, and it has been fixed at the level of default distribution rules (no contract, no tricks). This is not available in the ETH system.
3. Natural holding cost: BTC has the characteristics of high fees and easy congestion, which is not a bad thing for asset issuance. Failed transactions and congestion lead to a premium on mining fees, which makes the initial holding cost of inscriptions very high, fundamentally raising the threshold for market crashes and increasing the feasibility of market manipulation.
4. Low liquidity market: For a market to grow quickly from nothing, there must be a banker, and the first priority of a banker is to minimize the cost of market making. Here, the inefficient OTC trading market is actually an advantage: the banker does not need to lock in the pre-liquidity costs like Ethereum Tugou; there is no smart contract, which leads to the centralized pricing logic of the market, and it does not need to sweep the floor before it can be pulled like NFT. In extreme cases, a self-transaction can visually "pull the market".
5. Low development and deployment cost: The development cost of forking a set of inscription protocols is not high, not to mention the four-character local dog released directly. A team made a demo on Alt L1 in just 5 days. Even if a project operation is not done well, it can be restarted by changing the name and narrative.
Therefore, a large number of targets can emerge on the Inscription Protocol every day, so that liquidity will not be dispersed. Just like ETH, users cannot rush with large funds, they can only gamble every day and buy lottery tickets with small funds. Objectively, this increases the stickiness of funds, allowing $BTC on the protocol to achieve deflation in fact, forming the ICO (split) moment of $BTC.
Unresolved issues in Inscription:
The problem of ROI of being a banker: The purpose of setting up a market is to make money, whether it is a vicious rug or a benign community game. However, due to the launch mechanism problem, the project party and retail investors are on the same starting line when it comes to collecting chips. And due to the existence of robots, the silent launch model of Ethereum Tugou is also not advisable. In the absence of smart contracts, except for the trading market project party who can still charge some service fees, among other inscription project parties, only the miner project party can solve the problem of grabbing chips and revenue by raising gas and rushing to start. A well-known inscription project party contacted me in May and wanted to join the SUI ecosystem, but explicitly refused to do inscriptions on SUI, because it was not profitable.
It is not difficult to understand why the Inscription project team started to think of ways to launch dual chains, and even returned to the old path of pre-sale. As the bull market deepens, the high standard of fair launch will most likely become more and more out of shape, and return to the old path of centralization. After all, Inscription is an exchange model, and the first service object of the exchange is LP.
What have we learned from the development of inscriptions?
If you want to trade in a low liquidity market asset, you can:
1. Starting from a strong consensus ecosystem, we will try our best to strengthen the meme of fair launch and the inability of the team to do evil.
2. If you want users to hold the asset for a long time, you should increase the holding cost in disguise; if you want users to play with the asset for a long time, you should increase the speed of the target emergence. You must get at least one of the two.
3. Reduce the cost of pulling the price before the market consensus is formed as much as possible, reduce the demand for front-end liquidity, and grasp the pricing initiative.
4. Use relatively covert methods to absorb funds at low cost, or make profits by selling water.
5. Development and operation materials should adopt a replicable structure as much as possible. The success of the opening is 30% effort and 70% luck. The more the operation is carried out, the lower the unit cost.
In addition, if you want to create an inscription protocol, it is basically indexer+dex+wallet. The production time and cost depend on the status of the specific chain, and one week is left for audit. If you start planning to copy the platform now, you need to make sure that the inscription narrative is still popular at least one and a half months later.
