The Spring of SATS: The Bright Star in the Inscription Track

Since Bitcoin's rebound from its low on July 5, SATS has surged over 200%, not only performing the best in the inscription sector but also ranking among the top in the overall market rebound. The reason behind this is the significant change in SATS's fundamentals, combined with a price increase after long-term capital accumulation. In the next two months, SATS is likely to become one of the most noteworthy projects in the Bitcoin ecosystem. This article will review and analyze the recent important changes of SATS.

1. SATS Established as Gas Fee

A certain trading platform is developing a brc20 swap module, with plans to launch it on the Bitcoin mainnet and the layer 2 network Fractal Bitcoin developed by the platform in the future. In terms of development progress, the swap release date on L1 has not yet been determined, but the Fractal swap is expected to go live as scheduled in September this year.

On July 7th, the platform clearly stated in an article introducing the Swap module that they aim to provide a seamless and consistent experience for the Bitcoin mainnet and Fractal Bitcoin. From the user's perspective, the main advantages of Fractal Swap are faster confirmation speeds and lower overall fees. Both share the commonality of being based on the brc-20 protocol and using brc-20 sats as gas fees.

2. The New Narrative Introduced by the Platform

2.1 Development of brc20Swap

The core goal of brc20 Swap is to enable other teams to build their own exchange platforms based on the platform's code. This will standardize and unify brc20 asset transactions that previously relied on centralized and information-asymmetric indexers.

Currently, most of the work on the swap module has been completed, and the remaining tasks mainly include:

• Assist indexers outside of the platform's indexer to effectively identify and calculate inscriptions related to the exchange module.
• Ensure that the computational results submitted by the platform are consistent with those of other teams to avoid accounting discrepancies.

Fractal Bitcoin network built on the BRC20 standard 2.2

Fractal Bitcoin aims to expand the Bitcoin network through the brc20 standard. On this network, the platform will offer a product identical to the mainnet swap module functionality—Fractal Swap, ensuring that projects on Fractal Bitcoin have good liquidity from the start. In the future, BTC and other mainnet assets can also exist as brc-20 wrapped assets on Fractal Bitcoin, providing greater flexibility.

Fractal Swap will implement a competitive rollup mechanism, allowing users to package the aggregated results into the sequencer, thereby earning transaction fees generated from all transactions within the aggregation (brc-20 sats). This process is similar to how miners submit packaged transactions to the network and receive block rewards, further establishing sats as the network gas fee.

2.3 Large-scale airdrop inscription PIZZA

The PIZZA inscription was launched by a certain platform to commemorate the 14th Bitcoin Pizza Day and was airdropped for free to platform users. Unlike previous public minting inscriptions, users did not need to spend any additional fees to claim it. At that time, over 200,000 addresses participated in the claim.

The eligibility requirements for PIZZA include:

• Addresses that have interacted with the platform services in the past 3 months
• Addresses holding more than 500 platform points
• Addresses that have interacted within the brc20-swap module
• Platform OG Pass holders

Currently, PIZZA has become one of the assets with the most holders in BRC20 and inscription assets.

Through these three new narratives, the platform strives to bring BRC20 assets back to the focus of the Bitcoin ecosystem.

3. Data tracking of SATS

3.1 Comparison of Holders and Market Value

Among the popular assets in BRC20, PIZZA has the highest number of holders but the lowest concentration of chips. SATS has the highest share of first addresses and a larger number of holders, with higher chip concentration and holder consensus than ORDI and RATS, while its market value is lower than that of ORDI.

3.2 Chip Distribution

From a weekly perspective, SATS has been continuously declining for 4 months since its rise at the end of February. The bottom cost for some positions at the exchange is around 0.00018 for 1000 SATS. Currently, after the second week of rising from the bottom, it is challenging the previous area of high trading volume near 0.0003, with the next area of high trading volume around 0.0005.

3.3 contract data

On July 17, data from a certain trading platform's contract showed that the account long-short ratio was 0.751, while the large account long-short ratio was 1.6425, indicating a higher proportion of bullish funds. The rapid surge within 24 hours mainly liquidated short positions. In the liquidation map, after the liquidation of short positions at 0.000225 and 0.00024 with 1000 SATS, not many new short positions have formed above 0.00028.

4. Summary

1. After the narrative update, SATS has a fundamental difference from other inscriptions. SATS has become the gas fee for brc20 swap on the Bitcoin mainnet and the fractal network. In addition to having the meme attributes of the Bitcoin ecosystem, it now also has practical token use cases. With the development and promotion of related products, its scale is expected to expand rapidly in the future.

2. The timing and price points are still expected. During the product development process, the fractal network will officially launch in September, and the real implementation and use of SATS as gas fee will continue until after September. Furthermore, based on the absorption time and price increase of the K-line, there is further price expectation for SATS in the coming months alongside the overall market improving.

3. The risks of SATS may come from the underlying capital attributes and competition in horizontal tracks. The capital behind brc20 is still primarily Eastern capital, and there is a competitive relationship between the Bitcoin solutions of brc20 and the utxo+runes solutions. Recently, the UTXO swap based on RGB++ has also gone live on the mainnet, and in the medium term, attention should be paid to whether there is a capital conversion between the two.