jakiro
Author: Huajiao, @off_thetarget
The HK conference chatted with a few friends who were doing crypto projects. The most complaints about it was: “Our track technology is not bad, it is all top-level support, and has been working for many years. Why can’t it become popular?” Some people say it is because of slow development, some people say it is because the market is not popular enough, but I think the problem is more fundamental – the crypto track is too “wild”, like a group of athletes without coaches running on the field, which seems lively, but in the end they all fell into the mud pit.
1. Why do global trading and rules need?
Refer to the entertainment industry, starting a number -> Promoter -> Public opinion -> Navy debate -> Business evolution and monetization, every link is the formulation of rules, and obeys this rule from top to bottom.He is both a hidden rule and a clear rule. Rules drive the industrial chain and drive the upstream and downstream. Everyone is subtly influenced by the rules.
Analogize to the “banker thinking” (and “pan-study”) in the financial market – a market that can truly survive has never relied on “free growth”.This set of rules may not be written in the white paper, but permeates the behavior of each participant, and some crypto tracks are always in the “one round of tours”.It is precisely because of the lack of this set of “rule instructions” or in other words, their so-called innovation cannot be directly guided to rule setting.
2. Market Trust Rules & Track Rules
There have been many “phenomenon carnivals” in the crypto industry, but its core is inseparable from innovation.There is no doubt that the entire crypto industry can see the test field of Web2, defi/gamefi/socialfi/various Fi, and everyone is trying to find the stock market how to spiral up the right foot in the spiral of the left foot.
Of course, during the exploration process, we will find that its core is inseparable from:1) Innovation on the asset side;2) Innovation on the trading side.
Let’s talk about the innovation on the asset side first, which includes innovations in asset categories & innovations in asset distribution,Define asset class innovations (e.g. Inscription Runes/ERC20 Tokens/NFT/SFT Assets)The innovation in asset distribution is ICO/airdrop/fork candy 1:1 giving/liquidity mining defi, etc.
Let’s talk about the ICO (initial token issuance) in 2017, what’s the result of “also ordinary people can participate in early-stage project financing”?The project party can write a white paper, build a Telegram group, issue coins, and attract several communities, and you can get tens of millions of dollars.
Early ICOs were completely a “wild way”: some projects ran away after issuing coins, some issued additional funds at will, and some promised to “double the online list” but failed to implement them. Until the end of 2017, a set of “default rules” was spontaneously summarized by the market and was “forced to abide by” by all projects. This is what I said, “the market minimum trust rules”
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White paper mandatory:You must write clearly the “project background, technical solution, and token economic model” (otherwise the user thinks it is “unreliable”)
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Standardization of public offering process:First, private placement (discounts to early investors), then public placement (public sales), and finally placement (exchange requires a “lockdown period”)
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generationCoin allocation rules and CMC/coingeco included,The exchange has posted token allocation, and it is still being used by BN until now
These rules are not determined by a project party, but are refined by the market using “treat experience”:Only by following these rules can the project be included in the exchange, trusted by users, and spread by the community.
This is not a track rule, but a “minimum trust rule in the market”. This rule is generally an established rule formed under subconscious endorsement.Belongs to the post-set rule (What is post-set? The source of trust is not the project itself, but the result of the above, so it is a post-set rule)
Let me talk about a few more examples about the real track formulation, most of which are accidental accidents, because our circle is just like a straw platform. I will focus on two examples, one is pumpfun and the other is the ordinals BTC ecosystem.
III. Case 1: Pumpfun
PumpFun, an interesting example, is automatically priced using the “bonding curve” algorithm, essentially modified by the Friend.tech curve mode.Use the so-called functional scheming to cover up the impermanent price loss in the middle,Buying once feels at a very low price. In fact, to make money, you have to take over more than 2 people to sell it so that you can make money (including the intermediate pumping rate). So,In essence, this is a trick, and it is a well-known “mutual aid plate”
Pumpfun sets a set of rules, uses constant consensus to modify it, and uses curve casting to keep everyone’s money in the “inner disk”. After you have enough money, go out to do LP. If you can’t play enough, you will always exist in the curve. This is the rule set by Pumpfun. His gameplay is to solve the problem that not many people have enough LP liquidity.
Use false early low-cost -> to deceive your “swap” liquidity -> If there are too many fake transactions, it will become real liquidity -> Naturally, it will be concealed by the situation
Then the pumpfun model makes the original issuance model faster, makes transactions faster, and makes thinking patterns faster. The emergence of pumpfun is not onlyThe rules have been created and the user habits have been affected through the rules, greatly reducing your average holding time (if you don’t sell, you are exiting liquidity)
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Pursuing speed,Buy at a lower point one second faster than others (retail investors start to understand nodes, solana’s Tips, and start to understand Twitter scrapers like bloosm);
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chip structure,In the past, the application scenarios of C-end were not found in arkharm chain analysis. The emergence of pumpfun allowed retail investors to consciously analyze the chips on the chain, and paid third-party software such as bubblemap/fast100x was born);
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User habits,The most user’s habit of scanning links has entered the front-end/botization, and trading bots have become the entrance to traffic;
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The rise of subculture,The popularization of news is tokens. This is the innovation of user habits brought by this round of pumpfun.
IV. Case 2: Ordinals
Ok, then let’s continue to look at Ordinals and the 9-month BTC ecological narrative.How he sets rules through protocols -> User behavior habits are changed -> Adapted upstream and downstream products = New narrative embedded by “rules”
First, the Ordinals protocol is a protocol that “engraves” crypto assets (called inscriptions) on the Bitcoin blockchain, allowing users to store and expose arbitrary data in the witness data of Bitcoin transactions to create digital assets similar to NFT. It is not an innovation, it is an “add-on” brought by BTC’s taproot soft upgrade.
In essence, there were such “digital assets” before, called color coins, which are familiar to old coin friends. In the early days, they tried to record “color” information by modifying UTXO’s output scripts (such as adding special opcodes or comment fields), and also needed off-chain indexing. At that time, the space was insufficient, and small pictures could not be placed.
The BTCtaproot soft upgrade after December 2022 allows the inscription data to be directly embedded in the Witness Data, and is verified by the entire network node as part of the transaction.
Ordinals is a specific product that was magnified after this upgrade. Its own set of patterns defines what inscriptions are, what is rare and what is inscription numbering. In theory, anyone can do another set of “rules system” and can be reorganized.
It’s not that he is irreplaceable, but that he is irreplaceable at that time, so what did he change?
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Quickly let the unisat team, who originally worked on the BCH project, find an opportunity and started supporting the inscription system in just one month, making Unisat the leader in BTC ecological wallets, laying the foundation for subsequent marketplace + and even public chains.
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It has received the attention of some miners, and some mining pools are very happy to see the prosperity on the chain
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Users begin to get used to UTXO, begin to get used to watching meme.pool, begin to understand what RBF is (replace by fee) is (replace by fee) is (replace by fee) is (replace by fee) is (replace by countersniper)
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Open up a brand new asset distribution channel – Mint Fair Casting, letting rules be imprinted in the hearts of every user
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The order book system on the trading side eliminates the set of AMM rules of ETH, allowing the originally illiquid assets to achieve false prosperity by observing the psychological price of “floor price”.
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There is a magical effect around Casey, and there are followers, project parties, and investors.
The rules of the protocol, user habits, and product followers have made Ordinals and the BTC ecosystem. This is the rule setting of the track, which is why it is so important.
5. Summary
Finally, I believe you can also discover the opening of a new track.It is not through old mechanisms, but through innovation, formulating new rules and new gameplay, and quickly following products with economies of scale, replicating these rules, so that they can be deeply rooted in people’s hearts, and just now, there are new narratives.
Anything that is accomplished is better to seek from heaven than to others, and not to follow others’ words, correct and dialectical, let the right EV permeate.
