What are the elements of a track that makes you sit right and get a hot start?

5 months ago
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What do the hot tracks in the crypto market have in common? How can we identify whether a track can explode out of the circle?

1. Why does the heat arise?

There is only one reason for the popularity, which is to let more people know and participate, so the following influencing factors are all analyzed around this point. It should be noted that the reasons why a track becomes popular do not necessarily include all of the following factors.

1. Low threshold for participation

The low threshold for participation includes the following key points:

  • The principle is simple and easy to understand

The simple principle means that even outsiders who don’t understand the blockchain industry can quickly accept it, so it is easier to spread than projects with complex principles. When we searched for the word out of the circle in some blockchain media, the most relevant tracks that appeared were NFT and chain games. Things like chain games that were originally part of Web2 or TradFi are easier for outsiders to understand and accept. Complex principles are the wall that keeps out outsiders, as stated in VISA’s research report “Cryptocurrency Phenomenon: Consumer Attitudes and Usage”: “55% of non-crypto users believe that the steep learning curve is the reason they have not invested in cryptocurrencies. .”

  • There are no restrictions on participation conditions or it is low cost

Participation in many projects has a prerequisite, which requires holding certain specific NFTs or its tokens, etc. Although this shows the popularity of this project and increases the value of its NFT and tokens, it also excludes a wider range of players because the gradually increasing price reduces users willingness to participate.

  • Relevant infrastructure is complete

Whether a track-related infrastructure is complete or not determines whether it is simple to operate and the experience it brings to users. If the operation is too complicated, it will greatly increase the learning cost for users outside the circle.

2. Have ongoing discussions

  • money making effect

The money-making effect is the best marketing. Whether it is GameFi or SocialFi, from the perspective of user experience, they are not as good as the projects in Web2. The reason for users to use them is just profitable speculation. Hot money in the market always follows the principle of capital entropy: capital always flows from places with low money-making efficiency to places with high money-making efficiency.

  • cultural attributes

Cultural attributes can increase market discussion and community cohesion, which is especially evident in Meme and NFT projects. Such projects generally have obvious community culture and cultural symbols, such as Miladys anti-idol culture (introduction from @codeboymadif) and Dogecoins Shiba Inu symbol, etc. However, cultural attributes can only be the icing on the cake, because the participants are still mainly speculative, and after the price drops, no one will continue to generate electricity for love.

3. A hundred flowers bloom rather than a single one.

This factor may not be applicable to some Meme tracks, because this factor is mainly applicable to some fields that focus on practicality. The more projects, the more intense the competition, which will bring more business innovation and product discounts. compete. This is especially evident in DeFi Summer, where each protocol has adopted token incentives, launched LP pools with higher APRs, and business innovations.

4. Especially embodies the word new

There is an old saying in the currency circle: Play with the new, not the old. The new track has greater room for imagination. New tracks often do not have a complete valuation system because they are new, which means that there is no market value that can be estimated, so there is greater room for growth. This essentially allows ordinary people to obtain it. Opportunities for cheap chips. Due to the reasonable estimation system in the old track, the Death-level projects invested by VCs have very high valuations as soon as they are launched, and it is difficult to have big profit opportunities in the secondary market. Only a few people can reap the dividends of track development. Can anyone still play on this track?

5. The track concept is imaginative

The Metaverse is probably the best example of this factor. The Metaverse is a grand concept. As an extension and expansion of the real world, people are very much looking forward to the huge opportunities and revolutionary effects of the Metaverse, which has started the craze of the Metaverse and tokens of concepts related to the Metaverse. For example, $Mana and $Sand both performed well in the last bull market.

What are the elements of a track that makes you sit right and get a hot start?

Data comes from:coingecko

6. Active publicity by project parties and communities

The popularity of a project is inseparable from the publicity of community project parties and communities. For example, the recent Ethereum inscription $ETHS and BRC-20s $rats, etc., their respective communities are frantically attracting traffic and building momentum for their own projects.

2. How should we exit safely during the carnival?

The profile of crypto users has never changed. Most of them are speculative and make money, and this will not change in the short term. As long as the markets FOMO sentiment is ignited, crypto users will actively embrace the bubble. Since it is a bubble and speculation, this also determines that no die-hard fans will hold their tokens wholeheartedly.

When a new bull market comes, the most dazzling projects will definitely be the projects that can bring the most profits, and behind them are leverage and Ponzi. Once the market turns, they are the ones who rise the fastest, and they are the ones who fall the fastest, directly changing from blue chip to stinky.

What signals can guide us to exit safely before the bubble bursts?

  • There is no innovation in reinventing the wheel, and funds and enthusiasm are dispersed

After a project becomes popular, there will be plagiarism from other projects, usually simple imitation and repetition of the leading project. This will only distract the markets attention and funds, but will not have a positive effect on the development of the track. When the number of imitation disks gradually increases and the money-making effect is exhausted by these imitation disks, the decline of the track is natural. Like in DeFi Summer, after Sushi conducted a vampire attack on Uniswap, there were many other protocols that stole liquidity through the high emission of tokens, which played a role in the development of the track. It was just a zero-sum game between different projects.

  • The popularity and prices of leading brands have cooled down, and there has been no steady rise.

There is no doubt that the track leader can play a leading role. If the popularity and price of the track leader begin to cool down, it will easily cause a collapse of market sentiment, and the related imitation market will inevitably lead to continuous sitting results. .

3. Why is the Bitcoin ecosystem so popular? Can the market continue?

The hottest topic recently is definitely the topic related to Bitcoin ecology, especially various inscriptions. The huge wealth effect has made many people flock to it. This round of market conditions is inseparable from the boosting effect of the rise of Bitcoin on the sentiment of the crypto market, but why can various inscription tokens stand out among many tracks? We will analyze it based on the above-mentioned explosive factors.

As for the participation threshold, complex principles and imperfect infrastructure limit its further spread, but fair first-level participation opportunities have become its major selling point, and retail investors have created this bull market that has nothing to do with VC;

In terms of discussion, there is no doubt that inscription tokens have a huge money-making effect. Whether it is the early $ordi, $sats, or some recent $atom and $pipe, they have brought huge returns to holders. Moreover, the BRC-20 token has also started a round of zoo market with obvious cultural attributes. A bunch of inscriptions named after animals are very popular, such as $rats, $bear, $cats, etc., as well as those of the previous NFT community. Inscriptions, such as $MMSS for black cats and $UCAT for angry cats;

In terms of richness, the Bitcoin ecosystem is not prosperous enough. Although there are many innovative protocols, there are still few opportunities for ordinary players to participate, and it is still in a relatively early stage. And now from the perspective of various inscriptions, there is a phenomenon of reinventing the wheel. It not only exists on the Bitcoin chain, but other chains also have their own inscription protocols. As a result, market attention and funds are distracted, and it is difficult for inscriptions on other chains to get out of the prosperous situation like Bitcoin inscriptions;

In terms of novelty, Inscription is a new asset form and a new concept proposed during the transition from bear market to bull market. It has not experienced a complete bull market, so it meets the new standard;

In terms of track imagination, Bitcoin is the most well-known chain, but its ecological comparison with Ethereum can be said to be pitiful. Ethereum originally undertook the task of supporting the development of smart contracts from Bitcoin, but now the development of the Bitcoin ecosystem has attracted the attention of the entire encryption market, attracting the entry of funds and developers, and its future development space is unimaginable.

Regarding the promotion of the project and the community, everyone should have experienced this. When a certain Twitter blogger talks about which inscriptions to buy, some communities find out and organize community members to go to the comment area to swipe their own code. currency, such as the $rats army swiping the screen, the currency withdrawal movement started after discovering that exchange data crashed, etc. The well-known CX coin Π coin, I heard that the community also has its own token $piin, and live broadcasts recommendations and purchases on platforms such as Douyin and Kuaishou, attracting many uncles and aunts.

In summary, the main reasons for the popularity of the Bitcoin ecology are: the participation threshold is very fair, the money-making effect and the cultural attributes of some inscriptions have brought extensive discussions, the track is novel and has room for imagination, various inscription communities have actively spread it, etc. But in the short term, the deployment of multi-chain inscriptions has led to the dispersion of funds and enthusiasm, and the inscriptions on the Bitcoin chain have cooled down. However, the Bitcoin ecosystem is not only about inscriptions, but also includes protocols such as RGB, Lightning Network, and BitVM. These protocols are still in the early stages of development and have not yet shown their due light, so we have reason to believe that the Bitcoin ecosystem will continue to grow here. Shine brightly in the bull market.


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