Can a name increase the stock price? Hype about narrative upgrade
Original author: Frontier Lab
Narrative upgrade track projects refer to those projects that quickly gain market attention and financial support by changing the original narrative, project logic, business model, launching revolutionary new products, reforming token structure, or merging with other similar projects, and possibly changing the project name.
Introduction
The cryptocurrency market has entered a bull market since 2024, and investment opportunities in the market continue to emerge. Historical data shows that the cryptocurrency market has the characteristics of alternating rises. Under normal circumstances, BTC is the pioneer of the rising trend of the entire industry, and then other tokens will begin to follow the rise. However, unlike in the past, most Altcoins performed relatively weakly in this bull market. Although BTC rose by 70.86% in 2024, most Altcoins failed to exceed BTC in terms of growth, and some even fell. Take the leading projects in the main tracks as an example: ETH (the leader of the public chain) has increased by 55.65% since the beginning of 2024; ARB (the leader of the ETH-L2 track) has increased by -37.81% since the beginning of 2024; LDO (the leader of the LSD track) has increased by -34.84% since the beginning of 2024; STX (the leader of the BTC-L2 track) has increased by 30.46% since the beginning of 2024; This rare phenomenon can be explained from two perspectives: macroeconomics and the crypto market: Macroeconomic perspective: The Federal Reserve has maintained a high interest rate environment of 5.25%, and there is uncertainty in the return expectations of risk funds, resulting in new investors being less than in previous bull markets.
From the perspective of the cryptocurrency industry: the supply side has increased significantly, and the market value of tokens released each month has continued to be high, which has made investors silent.
Although the overall cryptocurrency market has performed mediocrely, there are also some bright spots. For example, Meme tokens and AI tokens have achieved gains that have surpassed Bitcoin this year, attracting widespread attention from investors. In addition, some tokens that focus on the "narrative upgrade" of crypto assets have been ignored by most investors, and tokens with the concept of narrative upgrade are expected to become the new focus of market speculation this year.
Definition of the narrative upgrade track
The narrative upgrade track is an emerging concept that is no longer limited to a single project change, but covers a wider range.
The core of this concept is to give the project a new look and regain competitiveness through comprehensive upgrades and reforms. Specifically, the narrative upgrade track can be achieved by changing the narrative of the project, adjusting the basic logic of the project, upgrading the business model, launching innovative products, adjusting the token mechanism, merging with other projects, and even upgrading the brand.
In short, as long as the project can reshape its image by introducing transformative initiatives, it can be classified as part of the narrative upgrade track. The introduction of this concept has injected new vitality into the development of the project and opened up a new path for the progress of the industry. Therefore, the narrative upgrade track will become one of the important directions for the development of future projects and will definitely play an important role in future development.
Advantages of the narrative upgrade track
Having a user base: Most projects in the narrative upgrade track have usually experienced at least one bull and bear market and have a stable community and user base. In contrast, new projects usually take some time to build their own community and cultivate loyal users. The consensus gained by the narrative upgrade track projects makes it easier for them to be accepted by the market for their new changes.
High market trust: In the narrative upgrade track project, the team is more stable. After a long period of operation, the team has a deeper understanding of user preferences and market characteristics. Compared with new projects, the team of old projects is more likely to gain the trust of the market and users. It takes time for the team of new projects to gain a foothold in the market and gain recognition.
Strong resource integration: After long-term operation in the cryptocurrency market, such projects have accumulated various resources, including capital recognition, familiarity with more market-making teams, and exposure to more operating strategies, which is an advantage that new projects cannot compare with.
More experience: In the cryptocurrency market, in addition to having advantages in its own business and operations, the project also needs to be familiar with the operating rules of the entire market. Experienced teams can seize as many opportunities as possible at different time nodes in the market.
Although the saying "speculate on new but not old" is widely spread in the cryptocurrency market, the reason why old projects can survive in the market for a long time, especially those teams that have experienced bull and bear markets, are still actively promoting project changes. This is precisely because they have various advantages that other new projects do not have, which also provides impetus for the rise in token prices.
Classic Case - Vanar Chain
Before the narrative upgrade
Vanar Chain's predecessor Terra Virtua was founded by Gary Bracey and Jawad Ashraf. In 2018, Terra Virtua's mainnet was launched. At that time, Terra Virtua's main business was to build a public chain project based on the metaverse. It was originally a VR (virtual reality) and AR (augmented reality) content platform based on paid subscriptions and supported cryptocurrency payments. At that time, it belonged to the track category of public chains and metaverses.
After the narrative upgrade
The first narrative upgrade: In 2020, Terra Virtua carried out its first narrative upgrade. At that time, the entire cryptocurrency market started a wave of NFT issuance. Terra Virtua followed the industry trend and added an NFT service platform on the basis of the metaverse business, transforming itself into a digital collectibles (NFT) platform project.
The second narrative upgrade: In 2023, Terra Virtua carried out the second narrative upgrade, changing the name of the project from Terra Virtua to Vanar Chain, and replacing the original project token TVK with VANRY. Users who originally held TVK can exchange TVK for the new token VANRY at a ratio of 1:1. This project upgrade not only changed the project name and token, but also proposed changes in the project's main business. Gamefi's narrative was added to the original public chain based on the Metaverse and NFT, allowing users to experience and unlock games in the interactive Metaverse Player Lounge, and earn rewards such as Virtua XP and free collectibles in the process.
Third narrative upgrade: In 2024, Vanar Chain carried out its third narrative upgrade. Vanar Chain announced a partnership with AI giant NVIDIA and introduced multiple AI solutions in its products, including AI-driven IP tracking for brands, AI analysis for creators, AI-enhanced identity verification, and the use of AI to build and review DApps. Vanar integrated NVIDIA technology into the Vanar platform, providing developers with the tools to create advanced artificial intelligence solutions, adding narratives to the AI track.
To summarize, Vanar Chain has transformed from a metaverse public chain project at the beginning to a public chain project that spans the metaverse, NFT, Gamefi and AI narratives through three narrative upgrades. Vanar Chain can be said to have occupied the popular narratives of cryptocurrency in various periods, making it always appear in the hot topics of the market.
Narrative Upgrade Effect
Although Vanar Chain occupies the metaverse, NFT, Gamefi, AI and public chain tracks, its project itself currently focuses more on AI and public chain tracks, so we chose the project FET that also spans AI and public chain tracks.
Classic Case - Beam
Before X Narrative Upgrade
Beam's predecessor Axie 420 was founded in July 2021 by Marco van denHeuvel, Tommy Quite and Mark Borsten. The original purpose was to enable players in low-wage countries to play Axie infinity. However, in September 2021, it was renamed Merit Circle, expanding the project positioning from focusing only on Axie infinity to more popular games and the metaverse. Merit Circle's main business is to establish a game guild similar to YGG, establish a scholarship system and SubDao model, mainly by providing funds to players to let them go to gold, and then Merit Circle gets a share, which is equivalent to a large gold-making studio, belonging to the category of guilds in the Gamefi track.
After the narrative upgrade
Because the entire cryptocurrency market entered a bear market in 2022, the prices of tokens of various projects plummeted, and the revenue of the Gamefi track also dropped sharply. If Merit Circle still adheres to the original scholarship system and SubDao model, in addition to being surpassed by YGG in various businesses, the original system and system cannot make Merit Circle profitable and may not be able to support Merit Circle through the winter of cryptocurrency, so Merit Circle decisively transformed in 2022.
In 2022, Merit Circle began to change the structure and positioning of DAO, hoping to build a game DAO. Merit Circle divides DAO into multiple sectors. At present, its main sectors are investment, studio, game and infrastructure (based on the Beam game chain built by Avalanche), and the original token MC is exchanged for BEAM at a ratio of 1: 100.
Investment: The project investment funds come from 100 million USDC raised on the Copper platform. According to the MIP-2 proposal, an investment committee is established to be responsible for investment. The specific members are: Flow Ventures LP, Sergei Chan, CitizenX and Maven 11. The investment projects are clearly marked on the treasury of its official website, mainly including: USDC held, blue chip coins, NFT assets and tokens/equity related to the blockchain game track. Now the investment sector is the main source of income for Merit Circle.
Studio: The Studio brings value to other sectors in the DAO ecosystem and is the birthplace of creative projects within the Merit Circle DAO, collaborating with existing projects and projects from non-web3 companies. There are three main aspects:
Grants: These are divided into research grants and development grants, which are provided to researchers on specific projects and developers of projects respectively.
Edenhorde NFT Collection: The original NFT artwork was created by illustrator Andy Ristaino, and the IP story behind the NFT was written by Celia Blythe, the author and historian of "Edenhorde". A total of eight episodes have been released so far. Mainly release the project's own NFT.
Merit Circle Tactile: Also a creative NFT project, Merit Circle Tactile is a set of 650 merchandise boxes for the community, which contains seven wearable items (T-shirts, hoodies, scarves and hats). Holders of Merit Circle Tactile NFTs can obtain these merchandise boxes. NFTs are distributed in two stages, to proposal creators, contributors, and Edenhorde NFT holders for raffles.
Games: Promote and distribute cooperative games to acquire game users; provide players with learning tutorials for major popular chain games; provide Merit Circle game community users with early access to games, and players receive rewards (NFTs, raffles, etc.) by completing tasks.
Infrastructure: The infrastructure products that have been released so far are based on the Beam game chain built on Avalanche. According to the MIP-28 proposal, the original MC token will be converted to the BEAM token at a ratio of 1:100, but the Merit Circle name will continue to be the overall brand related to the Beam network and BEAM. BEAM will be used as the gas consumption and node staking token of the Beam chain in the future. And games have been released on the Beam chain one after another.
In summary, Merit Circle has transformed from a former game guild into a comprehensive game industry platform by investing in the primary market of blockchain games, co-developing games, building a blockchain game market distribution channel platform, and building infrastructure. Through business transformation, Merit Circle's business scope has become broader and more profitable.
Narrative Upgrade Effect
Now Merit Circle is already a comprehensive gaming industry chain, so we choose XAI, which is also a gaming chain, to compare with it.
Classic Case - Fantom
Before the Narrative Upgrade
Fantom was founded in December 2019. Fantom positioned itself as a public chain because the emergence of various projects on the Ethereum chain at that time caused high gas fees and network congestion on the Ethereum chain. Therefore, Fantom aims to solve the limitations of scalability and transactions, and positions itself as a high-speed, low-cost alternative for developers building dApps and users seeking to interact with DeFi protocols.
After the narrative upgrade
On May 18, 2024, Fantom community members initiated a series of governance proposals on the Sonic network, the main contents of which include: Sonic will be a brand new L1 chain, and will be connected to chains such as Ethereum through native L2 cross-chain bridges. It is called the Sonic upgrade by the market.
The Sonic upgrade mainly includes: generating a new L1—Sonic Network. The upgraded network mainly uses parallel EVM to greatly improve the network's TPS, increasing the original 30 to 2000+, and improving the network experience by several levels. Developers and users can operate very smoothly and have a very good experience; at the same time, when designing node storage, the node requirements are reduced by more than 90%, greatly improving the speed of block synchronization; and in order to attract more liquidity to the chain, the new public chain is allowed to bridge to Ethereum's L2; a new native token S is issued, and users can choose to exchange FTM tokens for S at a ratio of 1:1.
In short, although the FTM upgrade did not change the original narrative, it has made a qualitative improvement in the performance of the project and occupied the track of parallel EVM.
Comparison with projects on the same track
After the upgrade, Fantom is a parallel EVM public chain. Let’s compare it with SEI, which is also a parallel EVM public chain:
Other Projects
Nervos Network
As a public chain project, Nervos Network was originally designed to address the expansion limitations faced by traditional networks such as Bitcoin and Ethereum. Nervos' blockchain is a layer-1 protocol that uses proof-of-work (PoW) consensus and supports smart contract development. It also includes a series of layer-2 expansion solutions to facilitate high-capacity use cases. Nervos' native token (CKByte or CKB) allows users and developers to apply for storage space on the Nervos blockchain in proportion to their holdings.
On February 13, 2024, Nervos Network announced the release of a new product: RGB++, which represents the transformation of Nervos Network from a public chain like layer-1 such as Bitcoin and Ethereum to a project dedicated to Bitcoin layer-2, using its own advantages to concentrate on Bitcoin's second-layer expansion.
In 2024, CKB's performance was very eye-catching, rising from 0.00397 U at the beginning of the year to 0.0379 U, an increase of more than 900%.
Arweave
Arweave was originally a decentralized data storage protocol designed to optimize long-term permanent storage through its unique access proof mechanism and token economic model. Since February 2024, Arweave has launched a new product, Arweave AO, which has changed the basic narrative level of Arweave, changing Arweave's main narrative from decentralized storage to public chain, and Arweave AO has the advantages of low fees, high-speed computing power, permanent storage of data, and very friendly contract deployment and state implementation, which gives Arweave a great advantage in the competition of public chains.
AR’s performance in 2024 was very eye-catching, rising from 9.64 U at the beginning of the year to a maximum of 49.55 U, an increase of 414%.
Track Risks
During the development of the project, most of the projects that improve the original projects and enhance the narrative level are new changes to cope with the unsuccessful development of the original track and the loss of competitiveness. Although the project may attract market attention again, it also faces long-term development risks.
Projects in the narrative upgrade track may have only made superficial improvements and failed to truly solve the original problems. It is unknown whether the team has performed well in overcoming previous problems. Therefore, such projects have greater development risks.
Even if the project has undergone changes and attracted some market attention, it may fail to achieve the expected results and still face the risk of not being accepted after market development, or even remain indifferent as before.
Therefore, when conducting investment research in the narrative upgrade sector, investors need to think deeply and conduct comprehensive evaluations to ensure that the new changes have truly solved the original problems and can bring long-term development. At the same time, it is necessary to recognize that the market's acceptance of new changes may not be high, so sufficient research work needs to be done.
Summary
Narrative upgrade track projects refer to those projects that quickly gain market attention and financial support by changing the original narrative, project logic, business model, launching revolutionary new products, reforming the token structure, or merging with other similar projects, and possibly changing the project name. Such projects usually have advantages such as broad consensus, stable team, rich resources and experience, which enable them to quickly increase the currency price, brand influence, and return to the competitive arena. However, such projects often experience failure or bleak stages, and the market has doubts about their prospects. Investors may have doubts about the future development of the project due to its poor performance in the past, and worry about whether the project can continue to develop and solve the problems it encountered before. Therefore, narrative upgrade track projects are easily overlooked by investors. Despite this, the potential of these projects is still huge, and old projects that have been upgraded and transformed usually show amazing token price performance, bringing a sense of rebirth to the market. Therefore, these projects still deserve enough attention from the market, and more narrative upgrade projects are expected to emerge in 2024.
This article comes from a contribution and does not represent the views of BlockBeats.
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