What are the elements that a track needs to have in order to become popular and successful?

What Key Components Make a Track Popular and Successful?

Author: Uncle Jian

1. Why does buzz arise?

There is only one reason for something to go viral, and that is to make more people aware of it and get them involved. So, the following factors are analyzed based on this point. It is important to note that a reason for a track to go viral may not necessarily include all the factors below.

1. Low entry barriers

Low entry barriers include the following key points:

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• Simple and easy to understand principles

A simple principle means that even outsiders who do not understand the blockchain industry can quickly accept it, making it easier to spread than projects with more complex principles. When we search for “out-of-circle” in blockchain media, the most related tracks that appear are NFT and blockchain gaming. Things like blockchain gaming that originally existed in Web2 or TradFi are also easier for outsiders to understand and accept. Complex principles act as barriers to outsiders, as described in VISA’s research report “Cryptocurrency Phenomenon: Consumer Attitudes and Adoption”: “55% of non-cryptocurrency users believe that the steep learning curve is why they do not invest in cryptocurrencies.”

• No restrictions or low costs for participation

Many projects have a prerequisite for participation, such as holding specific NFTs or their tokens, and so on. Although this indicates the popularity of the project and increases the value of its NFTs and tokens, it also shuts out a larger number of players because the gradually increasing prices reduce users’ willingness to participate.

• Sound infrastructure

Whether the infrastructure related to a track is sound determines the ease of operation and the user experience it brings. If the operation is too complicated, it greatly increases the learning cost for users outside the circle.

2. Ongoing discussions

• Profit-making effect

The profit-making effect is the best marketing strategy. Whether it is GameFi or SocialFi, from a user experience perspective, they are not as good as projects in Web2. Users only use them because of the speculative psychology of profit-making opportunities. The hot money in the market always follows the principle of increasing entropy of funds: funds always flow from low-profit efficiency areas to high-profit efficiency areas.

• Cultural attributes

Cultural attributes can increase market discussion and community cohesion, which is particularly evident in Meme and NFT projects. These projects generally have clear community culture and cultural symbols, such as Milady’s anti-idol culture (from @codeboymadif’s introduction) and the Shiba Inu symbol of Dogecoin, and so on. However, cultural attributes can only add icing on the cake because participants are primarily motivated by speculation, and once prices drop, no one continues to generate love.

3. Diverse tracks rather than a single standout

This factor may not be applicable to some Meme tracks because it mainly applies to practical areas. The more projects there are, the more intense the competition and the more competition there will be in terms of business innovation and product discounts. This is particularly evident in DeFi Summer, where each protocol has adopted token incentives, launched LP pools with higher APR, and introduced business innovations.

4. Especially reflects the word “new”

There is an old saying in the cryptocurrency industry, “Play new, don’t play old.” New tracks have greater imagination. New tracks often have a larger price appreciation potential because they are “new” and do not have a well-established valuation system or a predictable market value. This essentially provides an opportunity for ordinary people to obtain low-priced tokens. Old tracks, on the other hand, have a reasonable valuation system. “Unicorn” projects invested by VCs often have high valuations when they go live, making it difficult to profit in the secondary market. Only a few people can reap the benefits of track development. Can anyone still play in this track?

5. Track concepts are imaginative

The metaverse is probably the best example of this factor. The metaverse is a grand concept, an extension and expansion of the real world. People have great expectations for the huge opportunities and revolutionary impact of the metaverse, which has ignited the metaverse craze. Metaverse-related tokens like $Mana and $Sand performed well in the previous bull market.

6. Active promotion by project teams and communities

A project cannot gain popularity without the promotion from its project team and community. For example, recent projects like Ethereum Inscriptions ($ETHS) and BRC-20 ($rats) saw their respective communities passionately promoting and creating a buzz for their projects.

II. How Can We Safely Exit During the Hype?

The user profile in the crypto space has not changed. The majority of users are here to speculate and make money, and this won’t change in the short term. As long as the FOMO sentiment in the market is ignited, crypto users will actively embrace the bubble. Since it’s a bubble and speculation, this also means that there won’t be any die-hard fans who will always hold onto their tokens.

When a new bull market arrives, the most eye-catching projects are undoubtedly the ones that bring the highest returns, but behind them, there are also leverage and Ponzi schemes. Once the market turns, they rise the fastest and fall the fastest, transitioning directly from being “blue chips” to being “worthless.”

What signals can guide us to safely exit before the bubble bursts?

• Reinventing the wheel without innovation, funds and enthusiasm are being diluted.

After a project goes viral, there will always be imitations from other projects, usually simple imitations and duplications of the market leader. This only serves to divert attention and funds from the market, without positively contributing to the development of that track. As more replicas emerge and profit margins diminish, it is only natural for the track to decline. For example, during DeFi Summer, after Sushi attacked Uniswap, many other protocols stole liquidity through high token emissions, resulting in a zero-sum game among different projects.

• Diminishing heat and stability of the market leader.

The leading project undoubtedly plays a leading role in the market. If the heat and price of the market leader start to cool off, it can easily trigger market sentiment collapse, which will also affect the imitations associated with it.

3. Why is the Bitcoin ecosystem booming and can the market sustain it?

Recently, the hottest topics are undoubtedly related to the Bitcoin ecosystem, especially various token inscriptions. The massive wealth effect has attracted many people. The current market trend cannot be separated from the positive impact of Bitcoin’s rise on the cryptocurrency market, but what makes these token inscriptions unique among many tracks? We will analyze them based on the factors mentioned above.

In terms of entry barriers, the complex principles and imperfect infrastructure limit its further dissemination. However, the fair opportunity for level one participation has become a major selling point, and retail investors have created this VC-free bull market.

In terms of discussion volume, token inscriptions undoubtedly possess a huge profit effect. Whether it’s early tokens like $ordi and $sats, or recent ones like $atom and $pipe, they have brought huge returns to holders. Moreover, BRC-20 tokens have also initiated a market with significant cultural attributes, featuring a lot of inscriptions named after animals, such as $rats, $bear, $cats, etc. There are also inscriptions from the NFT community, such as the black cat $MMSS and the angry cat $UCAT.

In terms of richness, the Bitcoin ecosystem is still not prosperous enough. Although there are many innovative protocols, there are not many opportunities for ordinary players to participate, as it is still in the early stages. Furthermore, from the perspective of various token inscriptions, there is a phenomenon of reinventing the wheel not only on the Bitcoin chain but also on other chains with their own token inscription protocols. As a result, attention and funds are being diverted, making it difficult for token inscriptions on other chains to replicate the prosperity of Bitcoin token inscriptions.

In terms of novelty, tokens are a new form of assets, a new concept proposed during the transition from bear market to bull market, and have not yet experienced a complete bull market, so they meet the “new” criteria;

In terms of imagination in the field, Bitcoin is the most well-known blockchain, but its ecosystem can be said to be lacking compared to Ethereum. Ethereum originally took on the task of supporting the development of smart contracts from Bitcoin, and now the development of the Bitcoin ecosystem has attracted attention from the entire crypto market, attracting funds and developers, and its future development space is unimaginable.

In terms of promotion by projects and communities, everyone should have experienced this. When a Twitter influencer talks about buying certain tokens, some communities organize their members to flood the comment section with their own tokens, such as the flood of $rats army, the withdrawal movement initiated after discovering exchange data manipulation, and so on. A well-known CX token and Π token, I heard that the community also has its own token $piin, and it is promoted and bought on platforms like TikTok and Kwai, attracting many older investors.

To sum up, the main reasons for the popularity of the Bitcoin ecosystem are: a fair entry barrier, the profitable effect and the cultural attributes of certain tokens leading to widespread discussion, the novelty and imagination of the field, and the active dissemination by various token communities, and so on. However, in the short term, the deployment of tokens on multiple blockchains has led to the dispersion of funds and attention, cooling down the popularity of Bitcoin-based tokens. But the Bitcoin ecosystem is not just about tokens; it also has protocols like RGB, Lightning Network, BitVM, etc., which are all in the early stages of development and have yet to show their full potential. Therefore, we have reason to believe that the Bitcoin ecosystem will shine in this bull market.

References:

1. “How to DeFi”

2. “Crypto Phenomenon: Consumer Attitudes and Usage”

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