BRC20 ecosystem warming up? Is it the prologue of a new beginning or an illusion?

Author: ChandlerZ, Foresight News

On February 24, the on-chain Gas fees for Bitcoin saw a significant increase after a prolonged period of low levels, rising from an average of 1-2 satoshis/byte to over 12 satoshis/byte for high-priority transactions. A few weeks ago, the Bitcoin mempool was completely cleared for the first time in nearly two years, but the number of unconfirmed transactions has now climbed back to over 100,000.

According to Geniidata data monitoring, on-chain minting activities have shown a highly concentrated characteristic in the past 24 hours, primarily focusing on the MASK project.

The total minting volume of MASK is 2.1 million, with each containing 10 tokens, and the current market price is around $0.18, giving it a total market capitalization of approximately $3.06 million. As of the latest data, the minting progress of this project has reached 82.69%, and this increase in activity has sparked widespread discussion in the market about a potential new round of recovery for the BRC-20 ecosystem.

From a deeper market logic perspective, the current crypto market is at a special time node. As the conspiracy theories surrounding the Solana and BSC ecosystems are widely questioned, the BRC20, which symbolizes "fairness" to some extent, seems to have rekindled market interest. However, the market's memory has not faded with time; the previous volatility in the Bitcoin ecosystem still casts a shadow over the market.

Watching Him Build High Towers, Watching Him Collapse

According to data from The Block, since April 20, 2023, driven by the BRC-20 ecosystem, the number of transactions on the BTC network has begun to rise sharply, with transaction volume increasing by nearly 100% in less than a month. The rise in transaction fees has been even steeper, increasing by nearly 10 times in less than half a month. During the most active phase of the BRC-20 ecosystem, over 70% of transactions on the Bitcoin chain were related to BRC-20 projects.

Behind this facade of prosperity lies a fragile ecological foundation. Entering 2024, the Bitcoin ecosystem has gradually entered a period of stagnation, which actually reflects the market's deep-seated dilemmas regarding the application layer of Bitcoin. Although the market once had high hopes for the Bitcoin ecosystem, believing that innovations based on the inscription protocol could inject new vitality into the Bitcoin network, the actual development trajectory has deviated significantly from expectations.

Looking back at the development history of the BRC20 ecosystem, we must confront a harsh reality: most early popular projects have experienced significant price retracements. ORDI fell from a high of $87 to $11, Sats dropped from 0.00000086 to 0.00000012, and other projects, including NFTs in the Bitcoin ecosystem, have seen declines of up to 90%, many of which have "gone to zero," leaving only projects like 𝛑 that are heavily reliant on ground promotion culture.

This phenomenon is not coincidental but rather an external manifestation of deep-seated structural issues in the market. The BRC20 protocol was designed with "real fairness" as its core concept, aiming to provide truly equal participation opportunities for all market participants through a completely transparent on-chain mechanism, eliminating reserved allocations and scientist mechanisms. While this design theoretically achieves maximum decentralization, it has exposed significant limitations in practice.

The Paradox of Fairness and Control

From the perspective of market structure, the scientist mechanisms and initial token distribution systems in traditional crypto projects are essentially market adjustment tools. Although these mechanisms are often criticized as manifestations of centralization, they play an indispensable role in maintaining market stability. Project teams can use these mechanisms to regulate market fluctuations to some extent, providing necessary price support for the long-term development of the project.

However, the completely open minting mechanism of the BRC20 ecosystem, while maximizing fairness of participation, has also led to a highly dispersed token structure. In the absence of effective price support mechanisms, market fluctuations tend to be more severe. In such cases, when market sentiment shifts, it is easy to trigger a chain reaction, leading to rapid price declines.

A deeper issue lies in the motivations of large capital participants. In traditional crypto projects, large funds can influence market trends through various mechanisms to gain profits. But under the inscription mechanism of BRC20, this operational space is greatly compressed. When these so-called "whales" or "institutions" find it difficult to establish effective control over tokens, they naturally choose to turn to other markets where capital management is easier. This creates a paradox: the pursuit of absolute fairness may lead to market instability, thereby harming the interests of all participants. In this situation, the market needs to find a balance between complete fairness and necessary market stability.

The resurgence of the MASK project to some extent reflects that the market's yearning for fair mechanisms has not completely faded, regardless of whether this project will still become a "shooting star." However, how to establish effective market stability mechanisms while maintaining basic fairness remains a core challenge facing the entire crypto ecosystem. This requires innovation at the protocol design level and may necessitate the introduction of new mechanisms to balance the seemingly contradictory goals of decentralization and market stability.