The Rise of SATS Inscriptions: A New Focus in the BTC Ecosystem

Since Bitcoin's rebound from the bottom on July 5, the price of SATS inscriptions has increased by over 200%. Not only has it performed well in the inscription track, but it has also ranked among the top in the overall market rebound. Behind this phenomenon is the combination of significant changes in SATS's fundamentals and the long-term accumulation of funds. For at least the next two months, SATS is likely to become one of the key targets worth paying attention to in the BTC ecosystem.

The New Positioning of SATS: Gas Fees

A certain trading platform is developing a brc20 swap module, planning to deploy it on the Bitcoin mainnet and the layer 2 network developed by the platform. Although the specific release date for the swap on L1 has not yet been determined, the swap on the layer 2 network is expected to go live in September this year.

The platform clearly states that whether on the mainnet or layer two network, BRC20 swap will use SATS as the gas fee. This decision gives SATS practical use, transforming it from a mere meme token into a functional token.

New Trends in the Platform

1. Development progress of brc20 Swap

The brc20 Swap aims to provide a foundation for other teams to build trading platforms. Currently, the development work is nearing completion, with the remaining tasks mainly including:

• Assist other indexers in effectively identifying and calculating swap-related inscriptions.
• Ensure consistency in calculation results to avoid accounting discrepancies.

2. Layer 2 network based on the BRC20 standard

The platform is developing a second-layer network based on the BRC20 standard, aimed at expanding the capabilities of the Bitcoin network. This network will offer products with the same functionality as the mainnet swap module, ensuring that the project has good liquidity from the start. In the future, it is also planned to support BTC and other mainnet assets as wrapped assets.

It is worth noting that this second-layer network will implement a competitive rollup mechanism, allowing users to earn transaction fees by submitting aggregated results (in the form of SATS). This further strengthens the position of SATS as the network gas fee.

3. PIZZA inscription large-scale airdrop

To commemorate the 14th Bitcoin Pizza Day, the platform launched the PIZZA inscription and conducted a free airdrop to users. Over 200,000 addresses participated in the claim, making PIZZA one of the BRC20 assets with the most holders.

SATS Data Analysis

1. Comparison of Holders and Market Value

Among popular brc20 assets, PIZZA has the highest number of holders but the lowest concentration of chips. SATS, on the other hand, boasts the highest percentage of first addresses and a larger number of holders, outperforming other major brc20 assets in terms of chip concentration and holder consensus, yet its market value remains lower than some competitors.

2. Price Trend

SATS has experienced a decline for 4 months since its rise at the end of February. It has now bottomed out and is approaching the previous trading volume zone around 0.0003, with the next important level at around 0.0005.

3. Contract Market Sentiment

The contract data from July 17 shows that long positions are dominant, and the rapid rise within 24 hours is primarily due to short positions being liquidated. Currently, there have not been many new short positions formed above 0.00028.

Summary and Outlook

1. The positioning of SATS has shifted from being merely a meme token to a token with practical uses, and its role as a gas fee will gradually expand with the development and promotion of related products.

2. There is still room for growth in terms of time and price points. The Layer 2 network is expected to officially launch in September, and the practical application of SATS as a gas fee will gradually unfold thereafter. Considering the initial accumulation period and the current increase, SATS still has the potential for further growth in the coming months.

3. Risks to be aware of include the attributes of funds and horizontal competition. BRC20 is mainly driven by funds from certain specific regions and faces competition from other technological routes in Bitcoin scaling solutions. For example, the UTXO swap based on RGB++ has recently gone live on the mainnet, and in the medium term, attention should be paid to the potential fund conversion that may occur between different solutions.