The Narratives & the Atlcoin Market

Introduction  

The Altcoin market works with narratives. But what is a narrative and why this is important? Well below we can see the definition of narrative:

Definition of narrative

• something that is narrated : STORY, ACCOUNT
• the representation in art of an event or story

In the context of cryptocurrency a narrative is a theme used to describe the functionality the currency is adding, developing.

Definition of narrative in the context of cryptocurrency

• the technological them used to describe the problem that the currency is used to solve 

Matic's is layer two Ethereum solution using side chain for performance reasons

The Market & The Narratives

Narrative is important because it help the retail and institutional investors to decide if the narrative of a currency is going to pick up in the near future e.g. the narrative describes a problem that requires solution. If the fundamentals are good and the narrative is popular then bingo.

Below we can see a schematic representation: 

The narratives that came up in this bull market are the following:

Below we can see the definitions on some of the narratives: 

Optimistic Rollups 

Optimistic Rollups (ORs) are one type of layer 2 constructions that do not run on Ethereum's base layer but on top of it. This enables running smart contracts at scale while still being secured by Ethereum. These constructions resemble Plasma, but trade the almost infinite scalability of Plasma to run an EVM compatible Virtual Machine called OVM (Optimistic Virtual Machine) which enables ORs to run anything Ethereum can.

Plasma

Plasma is a layer-2 scaling solution that was originally proposed by Joseph Poon and Vitalik Buterin in their paper Plasma: Scalable Autonomous Smart Contracts. It is a framework for building scalable applications.

ZK-Rollups

ZK-Rollups are one of the options being developed for layer 2 construction that increases scalability through mass transfer processing rolled into a single transaction.  

NFTs

An NFT is a digital asset that represents real-world objects like art, music, in-game items and videos. They are bought and sold online, frequently with cryptocurrency, and they are generally encoded with the same underlying software as many cryptos.

DEX

A decentralised exchange (or DEX) is a peer-to-peer marketplace where transactions occur directly between crypto traders. DEXs fulfill one of crypto’s core possibilities: fostering financial transactions that aren’t officiated by banks, brokers, or any other intermediary. Many popular DEXs, like Uniswap and Sushiwap, run on the Ethereum blockchain.

As the market started evolving we started seeing combinations of the narratives:

Popular narratives

Popular narratives are the narratives that solve a problem e.g. Ethereum is a network with high fess and scalability issues and therefore the popular narratives are the ones that help us drop the fees and increase the Ethereum network.

Narratives of the future 

The narratives of the future are the narratives that emerge in order to solve new problems or optimise the solutions that currently exist even more. A few examples can be seen below: 

How can you profit?

Simply find old or new narratives with good fundamentals and start buying.......

SOMETHING SMELL LIKE CLEAN ENERGY...... 

References:

•  docs.ethhub.io [1]