The BTC ecosystem sounded the clarion call for a new bull market. What did Inscription do right?

I mentioned in August that the new round of bull market will be started by new issuance mechanisms, trading mechanisms and market-making mechanisms that bring in dumb money. Looking back now, whether it is Inscription or Friendtech, they all confirm this view - don't be swayed by technology, narratives, or orthodoxy. The essence of the currency circle is assets, and assets are only related to chip distribution, holding costs, transaction costs, and market-making costs.

Maybe you still look down on the inscription and think it is a step backward. But it is undeniable that the horn of a new round of market has been sounded 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 the premium of mining fees caused by congestion lead to very high initial holding costs of inscriptions, which fundamentally raises the threshold for market crashes and increases 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 directly released. A team worked on the inscription on Alt L1 and finished the demo in 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 ROI problem 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, when it comes to collecting chips, project parties and retail investors are on the same starting line. 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 parties who can still charge some service fees, among other inscription project parties, only the miner project parties can solve the problem of grabbing chips and revenue by raising gas and rushing to run. 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 for a long time, you should increase the speed of the target emergence. At least one of the two is required.

3. Minimize the cost of pulling the price before the market consensus is formed, reduce the demand for pre-liquidity, and hold the pricing power

4. Using relatively covert methods to save the country at a low cost by absorbing funds, or selling water to make profits

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 done, 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 specific chain status, 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.