Author: 0xFish⚛️
Here is the difference between colored coins and pledge:
You can understand staking as transferring the ownership of your assets to a third party, such as a centralized service or a decentralized service. In essence, the assets have left your wallet. Whether the money can be returned to your wallet is another question.
For example, DAI is a good example. You pledge your assets and then get the issued $DAI. What you face is whether it can maintain its value and whether you can get your pledged assets back. The collapse of LUNA and UST is an example.
Dyeing only writes some marks on your assets. For example, the logic of a beautiful number, for example, a banknote with serial number 88888 will be more valuable than the original banknote. It has a speculative attribute in itself, and if you lose it, you can still use it as an ordinary banknote.
In fact, the significance of ARC20 itself is not coloring, but defining a new ceiling. The ceiling of BTC is that the subsequent rewards are getting smaller and smaller, so this part of the computing power will need a new POW to maintain operation, or transfer to other new chains, but it is difficult to guarantee stable returns.
In other words, there are 210 trillion satoshis that can be dyed. The core of ARC20 is the POW mining mechanism. This mechanism can be said to be the reason why ARC20 has not become popular. To put it bluntly, the wealth-creating effect is too poor. You cannot issue a coin and then find a KOL to hype it up, and then pull the price up dozens or hundreds of times without requiring too much cost.
In addition, the concept of one coin for one satoshi means that if I want to issue a 10 billion token, such as the current Dragon One $quark, which is 100 BTC, if you are a banker, you need at least 51 BTC to control the market, which is too expensive. This is also the reason why it is impossible to quickly increase or decrease the price, so you can see that there are very few ARC20 tokens, which are not on the same level as BRC20 and Runes.
I believe that most tokens will disappear in the next bull market. If you buy BRC20, will all the tokens except the top three be worth zero? Runes basically only have Dog. If it is worth zero, you will only have 546 satoshis in the future. Even if 1 satoshi is worth 1 U, your tokens that were originally worth thousands or hundreds of U will only be worth this much. And the premise of this is that 1 BTC is worth 100 million U.S. dollars.
Suppose you bought 1000U of ARC20 tokens with 50% of Satoshi. In fact, you spent 500U to buy 2 bullish lottery tickets. One is for BTC, and you believe that it will rise to more than the current price of 1000U in the future. The other is an investment in the current token, and you think its increase will be more than 10 times. Otherwise, why would you buy it? Just buy BTC, and you will get 2000U at 2 times.
If you buy ARC20 and bet wrong, BTC will have to increase fourfold to achieve a return of twice your original capital. If the profit and loss ratio is not large, the most reasonable thing to do is to buy the most stable target.
To put it simply, ARC20 = 50% BTC + 50% altcoins. You can achieve the same effect by using half of your current funds to buy BTC and the other half to buy other altcoins.
But for me, I am more optimistic about the DeFi concept of BTC ecosystem. Currently, Unisat has bet on Fractal Network. In my opinion, it is no different from BCH back then. Except for dispersing part of the main network's funds, it does not make any positive progress in the ecological tour. It is similar to Merlin. The only good thing is that Fractal Network has a pure bloodline, and Merlin is even just an EVM chain.
I believe that in the future there will be an intermediary service provider that lends gold as raw materials. For example, I am a person with superb operational capabilities and awesome design skills. I have some money now, and I don’t want to spend it all on gold, so I find an institution to mortgage my house and exchange it for some gold. Then I process the gold, redeem my house after selling it, and I also make money.
In the future, in order to issue an ARC20 token, I may look for major BTC holders to borrow assets for my project. For investors, I don’t have to turn my money into a bunch of completely worthless tokens in the future. At least part of the money I invested can be turned into the most valuable BTC.
As for the future, would you believe more if someone told you, "Leave your gold with me and I will give you a corresponding non-gold jewelry to hang on your body, and then you can come to me to exchange it back later?" Or would you believe more if someone told you, "You leave your gold with me and I will give you a corresponding non-gold jewelry to hang on your body, and then you can come to me to exchange it back later?" Or would you believe more if you make the gold into decorations to hang on your body, and then sell them directly when you need them? I believe everyone will have the answer.