Introduction

The cryptocurrency market has entered a bullish phase since 2024, and investment opportunities in the market are constantly emerging. Historical data shows that the cryptocurrency market has a characteristic of alternating rises. Under normal circumstances, BTC is the pioneer of the rising trend of the entire industry, and then other tokens will start to follow and rise. However, what is different from the past is that most Altcoins are relatively weak in this bull market. Although BTC rose by 70.86% in 2024, most Altcoins did not exceed BTC, and even fell. Take the leading projects in the main tracks as examples:

• ETH (the leader of the public chain) has risen by 55.65% from the beginning of 2024 to the present;
• ARB (the leader of the ETH-L2 track) has fallen by -37.81% from the beginning of 2024 to the present;
• LDO (the leader of the LSD track) has fallen by -34.84% from the beginning of 2024 to the present;
• STX (the leader of the BTC-L2 track) has risen by 30.46% from the beginning of 2024 to the present;

This rare phenomenon can be explained from two perspectives: macroeconomics and the crypto market:

• Macro-economic perspective: The Federal Reserve has maintained a high-interest-rate environment of 5.25%, and the return expectations of risk funds are uncertain, leading to fewer new investors than in previous bull markets.
• Cryptocurrency industry perspective: The supply side has increased substantially, and the market value of tokens unlocked every month continues to be high, which makes investors silent.

Although the overall cryptocurrency market performance is mediocre, there are also some bright spots. For example, Meme tokens and AI tokens have achieved higher returns than Bitcoin within the 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 hype within the year.

Definition of Narrative Upgrade Track

The narrative upgrade track is an emerging concept that is no longer confined to a single project transformation but covers a broader range.

The core of this concept is to completely upgrade and reform the project, making it fresh and regaining its competitiveness. Specifically, the narrative upgrade track can be achieved by changing the narrative style 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, or even upgrading the brand.

In short, as long as the project can reshape its image through transformative measures, 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 new paths for the progress of the industry. Therefore, the narrative upgrade track will become one of the important directions for the future development of the project and will play an important role in future development.

Advantages of Narrative Upgrade Track

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 group. In contrast, new projects usually need some time to establish their own community and cultivate loyal users. The consensus obtained by the narrative upgrade track projects makes it easier for them to accept their new changes in the market.

High market trust: In the narrative upgrade track projects, the team is more stable. After a long time of operation, the team understands users’ preferences and market characteristics more deeply. Compared with new projects, the team of old projects is more likely to gain the trust of the market and users. The team of new projects needs time to stand firm in the market and gain recognition.

Strong resource integration: After long-term operation in the cryptocurrency market, these projects have accumulated various resources, including capital recognition, familiarity with more market-making teams, and contact with more operational strategies, which are new projects cannot compete with.

Richer 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 operation rules of the entire market. Experienced teams can seize as many opportunities in the market at different times as possible.

Although the saying “hype new 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, is still actively promoting project changes. This is precisely because they have various advantages that other new projects do not have, which provides the driving force for the rise in token prices.

Classic Cases

Vanar Chain

Before the narrative upgrade

The predecessor of Vanar Chain, Terra Virtua, was founded by Gary Bracey and Jawad Ashraf. The mainnet of Terra Virtua was launched in 2018. At that time, Terra Virtua’s main business was to establish a public chain project based on the metaverse. The original business was a subscription-based VR (Virtual Reality) and AR (Augmented Reality) content platform that supports cryptocurrency payment. At that time, it belonged to the track category of the public chain and the metaverse.

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 the trend of issuing NFTs. Terra Virtua followed the industry trend and added NFT service platforms on the basis of the metaverse business, transforming itself into a digital collectible (NFT) platform project.

The second narrative upgrade: In 2023, Terra Virtua carried out its second narrative upgrade, changing the project name from Terra Virtua to Vanar Chain, and replacing the original project token TVK with VANRY. Original TVK holders can exchange TVK for the new token VANRY at a ratio of 1:1. This project upgrade not only changed the project name and tokens but also proposed changes in the main business of the project. On the basis of the original public chain based on the metaverse and NFT, the narrative of Gamefi was added, allowing users to experience and unlock games in interactive metaverse player lounges, and earn Virtua XP and free collectibles and other rewards in the process.

The third narrative upgrade: In 2024, Vanar Chain carried out its third narrative upgrade. Vanar Chain announced a partnership with AI giant NVIDIA and introduced several AI solutions into its products, including AI-driven IP tracking for brands, AI analysis for creators, AI-enhanced identity verification, and DApp construction and review using AI. Vanar integrated NVIDIA technology into the Vanar platform, providing developers with tools to create advanced artificial intelligence solutions, and added the narrative of the AI track to itself.

In summary, Vanar Chain has gone through three narrative upgrades and has transformed from an original metaverse public chain project into a public chain project that spans the metaverse, NFT, Gamefi, and AI narratives at the same time. Vanar Chain can be said to occupy the hot narratives of the cryptocurrency at various times, 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 currently focuses more on the AI and public chain tracks, so we choose the FET project that also spans the AI and public chain tracks for comparison.

Beam

Before the narrative upgrade

The predecessor of Beam, Axie 420, was founded by Marco van denHeuvel, Tommy Quite, and Mark Borsten in July 2021. The original purpose was to enable players from low-wage countries to play Axie infinity. But in September 2021, it was renamed Merit Circle, and the project’s positioning was expanded 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 mode, mainly by providing funds to players to make gold, and then Merit Circle gets a share, equivalent to a large-scale gold-making studio, which belongs to the guild category in the Gamefi track.

After the narrative upgrade

Because in 2022, the entire cryptocurrency market entered a bear market phase, the prices of various project tokens plummeted, and the income of the Gamefi track also fell sharply. If Merit Circle still insists on the original scholarship system and SubDao mode, besides being surpassed by YGG in all aspects, the original system and system may not be able to make Merit Circle profitable and may not be able to support Merit Circle to survive the cryptocurrency winter, so Merit Circle resolutely carried out the transformation in 2022.

In 2022, Merit Circle began to change the structure and positioning of DAO, hoping to build it into a game DAO. Merit Circle divides DAO into multiple sections, and its main sections are currently divided into investment, studio, games, and infrastructure (Beam game chain built based on Avalanche), and the original token MC is exchanged for BEAM at a ratio of 1:100.

• Investment: The source of funds for project investment is the 100 million USDC financed on the Copper platform. According to the MIP-2 proposal, an investment committee is formed to be responsible for investment. The specific members are: Flow Ventures LP, Sergei Chan, CitizenX, and Maven11. The projects invested in are clearly marked on its official website’s treasury, mainly including: held USDC, blue-chip coins, NFT assets, and related tokens/equity in the chain game track. Now the investment section is the main source of income for Merit Circle.

Studio: The studio brings value to other sections in the DAO ecosystem and is the birthplace of creative projects within Merit Circle DAO, collaborating with existing projects and projects from non-web3 companies. This mainly includes three aspects:

Grants: They are divided into research grants and development grants, which are provided to researchers and developers of specific projects, respectively.

Edenhorde NFT Collection: The initial NFT artwork is handled by illustrator Andy Ristaino, and the IP story behind NFT is written by Celia Blythe, the author and historian of “Edenhorde”. Currently, eight sets have been released. The main thing is to release NFT of the project itself.

• Merit Circle Tactile: It is also a creative project of NFT. Merit Circle Tactile is a set of 650 merchandise boxes provided for the community, containing seven wearable items (T-shirts, hoodies, scarves, and hats). Holders of Merit Circle Tactile NFT can get these merchandise boxes. NFT is distributed in two stages, and the distributees are proposal creators, contributors, Edenhorde NFT holders drawing lots, etc.
• Games: Promote cooperative games to get game users; provide learning tutorials for major popular chain games for players; provide early game experience for users of Merit Circle game community, players can get rewards (NFT, lottery, etc.) by completing tasks.
• Infrastructure: The infrastructure product that has been released is the Beam game chain built based on Avalanche. According to the MIP-28 proposal, the original token MC is converted into the token BEAM at a ratio of 1:100, but the name Merit Circle will continue to serve as the overall brand associated with the Beam network and BEAM. Subsequent BEAM will serve as the Gas consumption and node pledge token of the Beam chain. And games have begun to be released on the Beam chain.

In summary, Merit Circle has transformed from a game guild to a comprehensive game industry platform that invests in the primary market of chain games, cooperates in game development, builds a distribution channel platform for chain games market, and builds infrastructure. The transformation of business makes Merit Circle’s business range wider and its profitability stronger.

Narrative Upgrade Effect

Now Merit Circle is a comprehensive game industry chain, so we compare it with XAI, another game chain.

Fantom

Before the Narrative Upgrade

Fantom was founded in December 2019. Fantom’s positioning is as a public chain. At that time, with the emergence of various projects on the Ethereum chain, it led to high Gas fees and network congestion on the Ethereum chain. Therefore, Fantom aims to resolve the limitations of scalability and transactions. Its self-positioning is to provide a high-speed, low-cost alternative for dApp developers 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 about the Sonic network. The main content includes: Sonic will be a brand-new L1 chain and will be bridged to Ethereum and other chains through native L2 cross-chain. The market calls this the Sonic upgrade.

The Sonic upgrade mainly includes: creating a new L1—Sonic Network. The upgraded network mainly improves the network’s TPS significantly by adopting parallel EVM, raising the original 30 to 2000+, enhancing the network’s experience by several levels. The operation is very smooth when developers and users operate, and the experience is excellent. At the same time, when designing node storage, it reduces the requirements for nodes by more than 90%, greatly improving the speed of block synchronization. Also, to bring more liquidity to the chain, it allows new public chains to bridge to Ethereum’s L2. It issues a new native token S, and users can choose to exchange FTM tokens for S at a 1:1 ratio.

In summary, although FTM’s upgrade did not change the original narrative, it significantly improved the project’s performance and entered the parallel EVM track.

Comparison with Similar Projects

After the upgrade, Fantom is a public chain with parallel EVM. Let’s compare it with SEI, which is also a public chain with parallel EVM:

Other Projects

Nervos Network

The Nervos Network, as a public chain project, was initially aimed at solving the scalability limitations faced by traditional networks such as Bitcoin and Ethereum. Nervos’ blockchain uses a proof of work (PoW) consensus and supports smart contract development with its layer-1 protocol, and includes a range of second-layer scalability solutions to facilitate large-capacity use cases. The native token of Nervos (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, the Nervos Network announced the release of a new product: RGB++, which signifies that Nervos Network has begun its transformation from a public chain similar to Bitcoin and Ethereum’s layer-1 to a project specifically for Bitcoin’s layer-2, capitalizing on its own advantages to focus on Bitcoin’s second-layer expansion.

In 2024, CKB’s performance was very impressive, rising from 0.00397U at the beginning of the year to a peak of 0.0379U, an increase of over 900%.

Arweave

Arweave was initially a decentralized data storage protocol, aimed at optimizing long-term permanent storage through its unique proof of access mechanism and token economic model. Since February 2024, Arweave has launched a new product, Arweave AO, which has changed the basic narrative of Arweave and shifted Arweave’s main narrative from decentralized storage to a public chain. Moreover, Arweave AO has the advantages of low cost, high-speed computing power, permanent data storage, and very friendly contract deployment and state implementation, giving Arweave a significant advantage in the competition of public chains.

In 2024, AR’s performance was very impressive, rising from 9.64U at the beginning of the year to a peak of 49.55U, an increase of up to 414%.

Track Risks

During the development of projects, most projects that improve existing projects and elevate their narrative levels are to cope with the unsuccessful development of existing tracks and the loss of competitiveness, and to undergo new changes. Although the project may re-attract market attention, it also faces the risk of long-term development.

1. Projects in the narrative upgrade track may have only made improvements on the surface and have not truly solved the original problems. It is unknown whether the team has performed well in overcoming previous problems. Therefore, such projects have substantial development risks.
2. Even if the project has undergone changes and attracted some market attention, it may not achieve the expected results and still face the risk of rejection 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 comprehensively assess to ensure that the new changes truly solve the original problems and can bring about long-term development. It is also necessary to realize that the market acceptance of new changes may not be high, so adequate research work needs to be done.

Conclusion

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 structures, merging with other similar projects, and possibly changing the project name. These projects usually have advantages such as broad consensus, stable teams, rich resources, and experience, enabling them to quickly improve token prices, brand influence, and return to the competitive stage. However, these projects often experience failure or dim stages, and the market has doubts about their prospects. Investors may have doubts about their future development because of their poor past performance, worrying about whether the project can sustain development and solve previous problems. Therefore, narrative upgrade track projects are easily ignored by investors. Despite this, the potential of these projects is still huge. The revamped old projects usually show astonishing 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.

Disclaimer:

1. This article is reprinted from [X], the original title of the article is “Narrative Upgrade: The New Hype Focus”. The copyright belongs to the original author [@FrontierLab_ZH], if there is any objection to the reprint, please contact the Gate Learn team, the team will handle it as soon as possible according to the relevant procedures.

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