The SCP Model Drives the Next Bull Market

Since Satoshi Nakamoto invented Bitcoin in 2008, the cryptocurrency and blockchain industry has experienced several bull markets, each accompanied by the birth of new technological models. Each new technological breakthrough has led the market, attracting investors' attention and forming new hotspots. In this process, countless innovative projects have emerged. Although the hotspots are complex, overall, it is technological innovation that has driven the development of the industry. It becomes particularly important to comb through the development trajectory of the industry in the face of investment institutions' demand for predictions.

We believe that only genuine innovative models can lead the industry forward, and those projects that merely replicate, follow trends, or rehash old ideas cannot become industry leaders. The development of the industry mainly revolves around the innovation and evolution of two types of models: asset models and trading models.

Innovation in Asset Models
The first-generation asset model, led by Satoshi Nakamoto's Bitcoin (BTC), spearheaded the wave of decentralized digital currencies. Subsequently, projects with unique functions like Peercoin (PPCoin), Primecoin, and Colored Coins emerged. However, no matter how these projects added novel features, they could not escape Nakamoto's basic infrastructure—distributing new digital currencies through mining or other mechanisms.

The second-generation asset model was born from the emergence of Ethereum and the introduction of smart contracts, leading to the creation of ERC20 tokens. These tokens no longer required an independent blockchain but operated on Ethereum's consensus mechanism. Due to their ease of use, ERC20 tokens quickly gained market recognition and became the main actors of the 2015-2017 bull market.

The third-generation asset model is represented by NFTs (Non-Fungible Tokens), ERC721 tokens. NFTs shone brightly in the 2020-2021 bull market, driving a large number of artists and creators to join the blockchain industry.

Recently, inscription tokens based on the Bitcoin network have become a new rising force. This asset model maintains the same fairness characteristics as Bitcoin, attracting the attention of a large number of investors, indicating that it may lead to a new bull market.

Asset models have undergone several rounds of innovation, increasingly reflecting the innovative spirit of the cryptocurrency community, although driven by the demand for coin speculation. The biggest problem with asset models is that merely creating a new asset is hard to gain mainstream capital support. Although countless ordinary retail investors flock to it, institutional funds rarely hold more interactive or guaranteed token assets in large scale. This also shows that pure asset model innovation is not enough to support the entire industry.

Evolution of Trading Models
The innovation of trading models provides more on-chain interactions and application scenarios, attracting the attention of institutional investors. The trading model has evolved from off-chain to on-chain, from simple to complex, and from traditional financial paradigms to blockchain paradigms.

ICO (Initial Coin Offering) is a milestone in trading models, making it possible to finance projects through token exchanges. Despite its simplicity, ICOs still attracted a significant participation of institutional investors in the 2015-2017 bull market.

Subsequently, the industry's demand for on-chain matching trading models led to the birth of the AMM (Automated Market Maker) model. The AMM model was widely popular in the 2020-2021 DeFi boom, adopting this model for spot, derivatives trading, and lending.

However, the AMM model is not the best paradigm for derivatives trading and does not reflect the decentralized spirit of blockchain algorithmic pricing and risk sharing. Therefore, the new SCP (Smart Contract Counterparty Model) was created: an algorithmic pricing model where all traders act as buyers, and the contract is the only seller. This model solves the two major problems of pricing and liquidity, eliminating the need for matching and market makers, and providing a commission-free, slippage-free, unlimited liquidity trading experience, a revolutionary change to the traditional financial paradigm.

In summary, we expect the new bull market to be ignited by new asset models, stimulating industry enthusiasm, followed by new trading models leading the industry to further development. More professional institutional investors will enter the industry, forming a large market that can compete with traditional finance. In this process, technological innovation will be the core and key to driving the development of the industry.