The Rapid Rise of SATS Inscriptions: Analysis of the Reasons Behind and Future Development Prospects

Since Bitcoin bottomed out and rebounded on July 5, SATS inscriptions have performed outstandingly, with an increase of over 200%. This not only ranks it among the top in the inscription track but also shows excellent performance in the entire crypto market. The fundamentals of SATS have changed significantly, and the long-accumulated market demand has jointly driven its price rise. In the next two months, SATS is likely to continue to be an important asset worth paying attention to in the Bitcoin ecosystem. This article will review and analyze the recent important changes of SATS.

1. SATS Establishes the Status of Gas Fees

A well-known wallet is developing a brc20 exchange module, planning to launch on the Bitcoin mainnet and its self-developed Layer 2 network. Although the release date for the mainnet version has not yet been determined, the Layer 2 network version is expected to go live in September this year.

The introduction article published on July 7 clearly states that the wallet aims to provide a seamless and consistent user experience for the Bitcoin mainnet and layer two networks. The main advantage of the layer two network version is faster confirmation speeds and lower overall fees. The commonality of both versions is that they are 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 this module is to allow other teams to build their own exchange platforms based on existing code. This will transform the trading of brc20 assets from relying on centralized, information-asymmetric indexers to a standardized and unified model.

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

• Assist other indexers in effectively identifying and calculating inscriptions related to the exchange module
• Ensure that the calculation results are consistent with other teams to avoid accounting discrepancies.

2.2 Layer 2 network based on the BRC20 standard

This network aims to expand the functionality of the Bitcoin network through the BRC20 standard. It will provide products with the same functionality as the mainnet exchange module, ensuring that projects on the network have good liquidity from the start. In the future, BTC and other mainnet assets can also exist as BRC-20 wrapped assets on this network, providing greater flexibility.

The network will implement a competitive rollup mechanism, allowing users to submit aggregated results to sorters, thereby earning transaction fees (brc-20 SATS). This process is similar to Bitcoin miners submitting transactions and receiving block rewards. This further establishes SATS as the gas fee of the network.

2.3 Large-scale airdrop PIZZA inscription

To commemorate the 14th Bitcoin Pizza Day, a platform launched the PIZZA inscription and conducted a free airdrop. Users can claim it without any additional cost, with over 200,000 addresses participating. The claiming conditions include:

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

PIZZA has now become one of the most held assets in brc20 and inscription.

Through these three new narratives, the platform strives to push BRC20 assets back into the spotlight of the Bitcoin ecosystem.

3. SATS Data Analysis

3.1 Comparison of Holders and Market Value

Among popular brc20 assets, PIZZA has the highest number of holders but the lowest concentration of chips. SATS has the highest proportion of first addresses and a larger number of holders, with a higher concentration of chips and holder consensus than other major inscriptions, but its market value remains lower than some competitors.

3.2 Chip Distribution

SATS has been continuously declining for about 4 months since the surge at the end of February. The bottom cost of some positions in the exchange for 1000 SATS is around 0.00018. It has currently emerged from the bottom trend and is challenging the trading dense area near 0.0003, with the next dense area around 0.0005.

3.3 contract data

On July 17th, data from a certain trading platform's contracts showed that the account long-short ratio was 0.751, and the large account long-short ratio was 1.6425, indicating a higher proportion of bullish funds. The rapid surge within 24 hours primarily resulted in the liquidation of short positions. In the liquidation map, after the 1000 SATS short positions were liquidated at 0.000225 and 0.00024, no large new short positions have formed above 0.00028.

4. Summary

1. The positioning of SATS has undergone a significant change, becoming the gas fee for brc20 exchanges on the Bitcoin mainnet and layer two networks. In addition to its meme attributes within the Bitcoin ecosystem, SATS has gained practical use cases, and with the development and promotion of related products, its application scale is expected to expand rapidly.

2. The product development process and price trends are still expected. The Layer 2 network is expected to officially launch in September, and the actual application of SATS as gas fees will continue after September. From the K-line chart, SATS still has further upward potential in the coming months.

3. The risks faced by SATS may stem from the funding attributes behind it and competition in the horizontal track. The funding behind brc20 is primarily from Eastern capital, and there is competition between the Bitcoin solutions of brc20 and the utxo+runes solutions. Recently, UTXO swaps based on RGB++ have also gone live on the mainnet, and in the medium term, attention should be paid to whether there is a reciprocal relationship in capital conversion between the two.