What exactly is "narrative"? What is a good "narrative"?

(I)

The word "narrative" sounds rather illusory. However, if I define "narrative" behavior as - persuading the market to invest, does it become clear in an instant?

(II)

Regarding what is a good narrative, market data has revealed the answer for us. The investment growth attracted by the "chain abstraction" sector is far ahead, and it has undoubtedly become the most convincing narrative example at this stage.

The characteristics of the "chain abstraction" narrative mainly include: infrastructure attributes, high technical barriers, emerging sectors and other key aspects.

• Infrastructure attributes, in the multi-chain universe, the top-level application ecology has a rigid demand for "chain abstraction".

• High technical barriers indicate that participating in "chain abstraction" on the supply side requires considerable professional knowledge, and its realization also requires considerable resources and costs.

• Emerging sectors imply that "chain abstraction" has a relatively broad development prospect and greater growth potential.

It can be seen from this that a good narrative should at least show convincing persuasion in the three dimensions of demand, supply and growth space.

(III)

This can be used as a framework for analyzing sector or project narratives.

Three standards: demand, supply, and emerging (growth space).

MEME coins have great demand, but the technical and cost support on the supply side is relatively small. Some MEMEs are not pure MEMEs and can make products, so they will have more growth potential. As for growth space, it is no longer an emerging sector.

AI sector has strong technicality on the supply side, but the demand for the combination of AI and blockchain does not seem to be understood. Emergence is in the middle.

This can also explain why imitations are not as good as innovative products. Although imitations and innovative products may face similar demands, imitations have lower R&D and implementation costs on the supply side. On the other hand, imitations are naturally less emerging than original products.

(IV)

We can analyze the narratives of some sectors or tokens from these three perspectives.

It needs to be added that:

First, VCs will study and assess the technicality of projects when investing, so VCs can be placed in the supply side dimension.

Second, FDV. FDV is now one of the important indicators for the market to measure investability.FDV can also be considered on the demand side.