The Rise of SATS: A Target Worth Following in the BTC Ecosystem

Since the rebound of Bitcoin in early July, the increase of SATS has exceeded 200%, not only showing outstanding performance in the inscription track but also ranking prominently in the entire market. This is driven by significant changes in fundamentals as well as the accumulation of long-term funds. In the next two months, SATS is likely to continue to be one of the focal points in the BTC ecosystem. Let’s review and sort out the recent important changes of SATS.

1. SATS Establish the Status of Gas Fees

A well-known wallet is developing a BRC20 swap module, which is scheduled to launch on the Bitcoin mainnet and its self-developed Layer 2 network. Although the release date for the mainnet version has not been determined, the Layer 2 network version is expected to go live in September of this year.

The introduction article released in early July clearly stated that this wallet is committed to providing a seamless and consistent experience for the Bitcoin mainnet and layer two networks. Users will enjoy faster confirmation speeds and lower overall fees on the layer two network. The commonality between the two versions is that they are both based on the brc-20 protocol and use brc-20 sats as gas fees.

2. The Launch of the New Narrative

Development of the 2.1 brc20 exchange module

The core goal of the brc20 exchange module is to enable other teams to build their own exchange platforms based on this code. This will standardize and unify brc20 asset trading, which originally relied on centralized, information-asymmetric indexers.

Currently, most of the work on the exchange module has been completed. The remaining work mainly includes:

• Assist other indexers in effectively identifying and calculating inscriptions related to the exchange module.
• Ensure consistency in calculations among all parties to avoid accounting discrepancies.

Layer 2 Network Based on BRC20 Standard 2.2

This layer two network aims to extend the functionality of the Bitcoin network through the brc20 standard. On this network, products with the same exchange module functionality as the mainnet will be provided to ensure good liquidity for the project from the very beginning. In the future, there are also plans to introduce BTC and other mainnet assets as brc-20 wrapped assets, providing greater flexibility.

The network will implement a competitive rollup mechanism, allowing users to submit aggregation results to the sequencer to earn transaction fees ( brc-20 sats ). This process is similar to Bitcoin miners packing transactions and receiving block rewards. This further establishes sats as the network's gas fee.

2.3 Large-scale Airdrop Inscription

To commemorate the 14th Bitcoin Pizza Day, a certain platform launched a free airdrop of inscriptions. Unlike previous public minting, users can claim it without any additional costs, and the platform will send the inscription to the users' wallets after the inscription is completed. Over 200,000 addresses participated in the claim.

The application requirements include:

• Addresses that have interacted with platform services within 3 months
• Addresses holding more than 500 platform points
• There are interactive addresses within the brc20 exchange module.
• Platform OG Pass holders

This inscription has become one of the most held assets among brc20 and rune assets.

Through these three new narratives, relevant platforms are working to push BRC20 assets back into the spotlight of the Bitcoin ecosystem.

3. Data Tracking of SATS

3.1 Comparison of Holders and Market Value

Among the popular brc20 assets, the one with the most holders is a certain airdrop inscription, but it has the lowest chip concentration. SATS has the highest proportion of addresses among the first and a larger number of holders, ranking higher than the other two main competitors in terms of chip concentration and holder consensus, but its market value is still lower than one of them.

3.2 Chip Distribution

From a weekly perspective, SATS has been in a continuous decline for about 4 months since its rise at the end of February. The bottom cost for some positions on the exchange is around 0.00018. It is currently in the second week of a bottom rebound, pushing against the previous 0.0003 trading zone, with the next dense area around 0.0005.

3.3 contract data

On July 17, the contract data from a certain trading platform showed that the account long-short ratio was 0.751, while the large holder's 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, 1000SATS did not form a large number of new short positions above 0.00028 after breaking through 0.000225 and 0.00024.

4. Summary

1. The new narrative distinguishes SATS from other inscriptions fundamentally. SATS has become the gas fee for brc20 exchanges on the Bitcoin mainnet and layer two networks, possessing not only the meme attributes of the Bitcoin ecosystem but also practical use cases. With the development and promotion of related products, its application scale is expected to expand rapidly.

2. Timing and price points are still anticipated. The second-layer network is expected to officially launch in September, and the real application and use of SATS as gas fees will be after September. Based on the K-line accumulation time and the degree of rise, SATS still has further upward potential in the coming months as the overall market improves.

3. The risks of SATS may come from the underlying funding attributes and competition in the horizontal track. The funding behind brc20 is still mainly from Eastern sources. The Bitcoin solutions of brc20 are in competition with the utxo+runes solutions. Recently, the UTXO exchange based on RGB++ has also launched on the mainnet. In the medium term, it is necessary to pay attention to whether there is a reciprocal relationship in the conversion of funds between the two.