Can the Litecoin LRC-20 protocol replicate the success of BRC-20?

Original Title: "LTC20 Protocol: The Next Speculative Market for Hundredfold or Thousandfold Gains?"

Author: Sammi

New Narrative in Crypto - New Paradigm Investment Opportunities

In the past two weeks, the BRC market has exploded, creating many myths of sudden wealth. You must have seen similar statements: "If in March, you spent $300 to inscribe ORDI on BRC20, calculating at a cost of $3 per inscription for 1000 pieces, it would now be worth $1.5 million."

Every round of wealth creation in the crypto space essentially stems from the "evolution of token distribution methods," which is also the best assembly line for producing crypto billionaires in each cycle.

In 2016, POW mining produced coins, in 2017, ICOs (ETH exchanged for project tokens), in 2018, IEOs (exchange tokens exchanged for project tokens), Fcoin trading mining (mainstream coins exchanged for platform tokens), VDS resonance model, in 2020, DeFi (providing liquidity for tokens), airdrop farming (gas fee for project tokens), and in 2021, play-to-earn…

Then came the recent BRC20, which deploys, mints, and transfers inscriptions on Bitcoin. It represents a more decentralized and fair method of token distribution.

Its principle is similar to signing a $100 bill with a celebrity's autograph; if the inscription is limited to four characters and issued in limited quantities, its value would exceed that of an equivalent $100 bill because it has the basis for speculation. The premium's height is dynamically determined by multiple factors such as narrative, scarcity, and consensus.

Current market cap of BRC20 is approximately $487 million

Replicable Success Model - Time Machine Investment Principle

The hardest part of investing is timing, followed by pricing. It is very difficult to grasp whether a new track will explode and when it will do so; during the 0-1 process, a lot of time and capital may be wasted on countless zeros before the first one appears.

Therefore, whenever a new paradigm opportunity arises in the market, finding and betting on the second-tier leader of the track is a relatively simple and high-odds approach. For example, when the oracle track was hyped in 2020, if you missed the leader $LINK (9x in 130 days), you could still invest in $BAND (16x in 35 days); during the DeFi Summer, if you missed the leader UNI, there was later BSC chain's CAKE (with a peak increase of nearly 100x); if you missed CryptoPunk, there would still be Bored Apes, Azuki, etc.

Capital tends to favor proven business models and products, preferring to replicate with certainty rather than engage in high-risk, high-investment innovation. By continuously researching successful tracks and using the "Time Machine Investment Principle" to bet on projects with similar soil, it is also a shortcut to winning.

LTC20 - The Best Speculative Lowland

Bitcoin is gold, Litecoin is silver. If you missed the BRC20 of Bitcoin, don't miss the LTC20 of Litecoin.

Advantages of LTC20

The various xRC20 protocols that have sprung up like mushrooms after rain are a tangible manifestation of market FOMO, as users urgently seek the next opportunity for hundredfold or thousandfold gains. LTC20 is the optimal solution at present.

On May 2, the Litecoin community launched a fork of the BRC20 standard, named "LTC20."

Compared to BRC20: Litecoin produces a block every 2.5 minutes (Bitcoin every 10 minutes), allowing for faster transaction confirmations, while gas fees are extremely low (less than $0.1 per transaction, compared to Bitcoin's fees ranging from several to hundreds of dollars), giving it advantages in block speed, flexibility, and transaction costs.

Compared to DRC20: The DRC20 protocol launched by the Dogecoin community currently lacks official leadership, with various factions and a disorganized state. In contrast, LTC20 has an officially organized and supported inscription market. Additionally, Dogecoin's gas fees are about three times higher than those of Litecoin.

Compared to ORC20: ORC20 is a supplement to the BRC20 ecosystem, with a more flexible token issuance form, allowing for token inflation and unrestricted naming. ORC20 resembles an Ethereum ERC20 representation on Bitcoin. To some extent, it deviates from the basic premise of inscription speculation. One issue it raises is, if we can ERC20-ify Bitcoin, why not just use Ethereum's ERC20 directly?

The rise of BRC20 has been touted as a movement against centralization and wealth whales, but in essence, it reflects retail investors hoping to rise from their humble beginnings, letting institutions, major players, and trading platforms take on their trades.

A market with only retail investors and no major capital participation is like a pile of loose sand.

The core advantage of LTC20 compared to other xRC protocols lies in the narrative of Litecoin's halving in August, which will focus market funds and traffic on Litecoin. With the wealth creation effect of BRC20 in front and the halving narrative behind, LTC20 will become a reservoir for capital overflow, with a greater chance of attracting major players, institutions, and trading platforms.

Litecoin's market cap is approximately $6.8 billion, while the overall market cap of BRC20 is about $500 million. It only takes a small amount of capital to overflow into LTC20 to create many hundredfold or thousandfold investment opportunities.

Current Development Status of LTC20

The recent surge in LTC has led to a spike in speculative interest in this token. Currently, the nominal value of LTC's open interest (OI) has surged to $435 million, the highest level since the bull market phase of 2021.

The increase in OI after the price rise indicates that more capital is entering the market and trading the Litecoin halving trend.

Source: Coinglass

One of the key indicators of network growth is the number of new addresses. LTC's network activity has exploded to unprecedented levels. The number of daily active addresses soared to a historical high of 832,000 on May 10, with daily transaction volume also peaking on the same day, while Bitcoin had only 331,000. This is a significant milestone for Litecoin.

Source: Santiment

Unlike the surge in transaction fees recorded by Bitcoin and Ethereum during network congestion, Litecoin users have not experienced a spike in transaction fees.

Overview of LTC20 Inscription Concept:

The LTC20 ecosystem is currently in a very early stage, with infrastructure not yet complete and no dedicated trading market. The official trading market is expected to open in about three weeks.

Market Development Space for LTC20

The entry barrier for LTC20 is extremely low, with a minimum of just a few dollars needed to enter the Litecoin inscription market.

Users' sensitivity to price decreases; with a small cost, they have the opportunity to pursue high returns, which can easily lead to addiction and neglect of their costs. If there is a continuous wealth creation effect, LTC20 has the potential to become the largest inscription speculative market and traffic pool.

BRC20 and LTC20 are not in a competitive relationship but are interdependent and develop together.

What Litecoin needs to do is to lower the entry barrier and provide a smoother user experience, allowing the inscription market, which currently only has 1% participation, to expand to 5%, 10%, or even higher, making it more accessible to users in the future.

From this perspective, if BRC20 is benchmarked against the NFT market, LTC20 resembles a decentralized digital collectibles market. The height of BRC20 as the leader determines the upper limit of the track, while LTC20 and other xRC20 protocols horizontally expand the entire market scale, feeding back into BRC20 and growing the pie together.

Halving is Litecoin's Biggest Narrative

Litecoin's halving, as one of the biggest narratives in the crypto space, will draw the entire market's funds and attention to Litecoin, with the halving expected on August 3. If the interest groups behind Litecoin want to make a move, now is the best time.

The market always moves in the direction of least resistance. We can try to break out of fixed thinking patterns and shift the bet on whether Litecoin will have a halving trend from the $LTC price itself to LTC20.

From the perspective of cost-effectiveness, promoting the halving narrative through related inscriptions is the best way to leverage a small effort for a large outcome.

LTC20 is a small fulcrum; it only takes a few million to tens of millions of dollars to market it to ignite the market, even leveraging Litecoin's $6.8 billion market cap.

Taking the inscription $HALF, which is based on the concept of Litecoin's halving, as an example, with a total of 21 million pieces, the cost of minting one (1000 coins) is $1. If the major players use tens of millions of dollars to push the market cap of $HALF to $100 million, the increase of $HALF would be about 5000 times, and LTC20 would create a new wealth myth, ultimately forming a flywheel effect.

The wealth creation effect of the halving inscription HALF ------ FOMO funds rush into LTC20 ------ increasing use cases for LTC, driving LTC's price up ------ Litecoin miners profit / exchanges gain traffic ------ Inscription Summer ------ positive externalities for the industry (Web2 traffic influx)

Perhaps the market bulls have not yet formed a strong Schelling point sufficient to push Litecoin's market cap to a new high, but this consensus Schelling point is enough to ignite LTC20.

Speculative Game Under Positive-Sum Game

Gambling is a zero-sum game; it's either you die or I die. The essence of speculation is "positive-sum game," where the outcome can be that the vast majority of participants are winners, which is the charm of speculation.

The big trend of LTC20 is a positive-sum game, an incremental market.

If we treat the market as a chessboard, we can analyze the core interests and goals of various participants using a "panoramic thinking" approach.

Litecoin officials and the institutions behind them: Their core interest is the coin price and ecosystem. As an established mining coin, if the halving that occurs every four years does not elicit any response, Litecoin will inevitably be eliminated by the market, gradually disappearing from the long river of crypto history. The emergence of LTC20 increases the usage scenarios and frequency of Litecoin, and the dual narrative of halving + LTC20, using tens of millions to hundreds of millions of dollars to market the Litecoin inscription market, creates network effects and marketing value far more useful than directly pushing Litecoin itself.

Litecoin miners: The popularity of BRC20 has made Bitcoin miners the biggest beneficiaries. The leader has set an example, making Litecoin miners and mining machine vendors more intuitively aware of the benefits of promoting LTC20's development.

Trading platforms: Exchanges are essentially a traffic business, with core KPIs being users and traffic. They are willing to promote projects that can generate topic heat and attract user trading. Whoever can become the core trading market for LTC20 Token first will have the chance to become the next major traffic pool.

Media: The core demand of the media is to chase hot topics and create discussions. Litecoin's halving, as one of the biggest crypto narratives in the coming months, is a topic that all media cannot avoid. How to present the halving attractively and in-depth, LTC20 is excellent material for this. This promotion will, in turn, boost the development of LTC20.

Retail investors: FOMO psychology, having missed the wealth creation from BRC20, capital is urgently seeking the next outlet.

For the entire crypto industry: The user demographics behind blind boxes, digital collectibles, cards, and trendy toys are mainly Gen Z young people. Low investment, scarcity, curiosity, and experiential consumption are the core reasons attracting them. As digital natives, they are keen on exploring new things and believe everything can be speculated. LTC20 possesses similar attributes and soil, with the potential to become the next Web3 traffic entry point.

LTC20 is still a blank market, representing a super high-odds opportunity for betting on a bullish market game. The inscription cost only ranges from dozens to thousands of dollars, allowing for a chance to earn hundredfold or thousandfold returns.

The following chart illustrates the potential upward space for LTC20 if the inscription trend continues. This is a blue ocean with a high probability of rapidly growing from $0 to a market cap of hundreds of millions to billions of dollars.

While predictive analysis of the development of things is indeed important, failing to account for risk exposure turns it into a form of self-brainwashing fantasy.

A single spark can start a prairie fire, provided there is that spark source. The current risk point for LTC20 lies in the lack of adequate infrastructure; for example, if the LTC20 trading market is not launched, the 0-1 process cannot proceed. Or if the market is launched at a time when BRC20 or $LTC is experiencing a downturn, these are uncontrollable factors.

The market is like a weather vane; money flows wherever the wind blows. Before time provides the final answer, any affirmative or negative statements such as "the Litecoin halving trend is long gone" or "LTC20 will definitely develop" are worthless rhetoric.

True DYOR involves making forward-looking predictions about the direction of development while also managing risk, confirming the maximum bearable risk capacity, calculating the odds and payouts, and ultimately deciding whether to engage.