In an era where narrative is king, how can we use scoring models to find the next 100x narrative?

This is not just a formula, but a mental model that will usher in the next wave of cryptocurrency.

Written by: Ignas

Compiled by: Luffy, Foresight News

You may have spent countless hours trying to catch the next hot narrative in the crypto space. Get it right and you’ll win big. Get in too late and you’ll be left holding the bag.

In the crypto market, the highest ROI comes from:

  1. Identify narratives early

  2. Charting the capital rotation roadmap before others

  3. Exit when the expected bubble peaks

  4. Lock in profits

Then think: Will the next wave of narratives come? Narratives cycle, and speculative waves will return in the following situations:

  • There is real technological innovation behind the narrative, so it can rebound after the first wave of hype fades

  • New catalysts emerge

  • After the hype subsides, there is a determined community that continues to build

I elaborate on my thoughts in the following article:

叙事为王的时代,如何用评分模型找到下一个百倍叙事?

https://x.com/DefiIgnas/status/1757029397075230846

Taking Ordinals on Bitcoin as an example, we can clearly see 4 waves of speculation from the figure below.

叙事为王的时代,如何用评分模型找到下一个百倍叙事?

  1. December 2022: Ordinals theory released, little on-chain activity.

  2. March 2023: BRC-20 standard triggers the first wave of the market; activity cools down for six months.

  3. Late 2023-early 2024: Continued development triggers the second and third waves.

  4. April 2024: Runes launches, price spikes, then subsides a few weeks later.

Ordinals offer months of setup time and multiple exit opportunities, Runes offer only a short, single exit window. The space is currently dead.

Will Ordinals (including Runes), NFTs, or other new forms make a comeback? Maybe. It depends on my narrative rating.

Analytical Framework

叙事为王的时代,如何用评分模型找到下一个百倍叙事?

This is a framework for identifying hot new narratives and determining whether subsequent speculative waves are sustainable. This is a work in progress, but here is my 1.0 formula:

Narrative score = [(1.5 × Innovation × Simplicity) + (1.5 × Community × Simplicity) + (Liquidity × Token Economics) + Incentives] × Market Environment

This formula is not perfect, but it shows which factors are important and how they are weighted. Let’s break them down one by one!

Innovation

The innovation here refers to the crypto-native innovation at the technical level that I am concerned about.

The most powerful catalyst is innovation from 0 to 1. It can appear in new fields (DeFi, NFT, RWA, etc.), new token economics models (such as veToken), or even token issuance methods (fair launch, Pump.fun).

I have previouslywrote:Innovation from 0 to 1 has the uniqueness of changing the trajectory of the industry, and its originality will give birth to new crypto segments.

Identifying this kind of innovation is difficult due to cognitive biases. When something new emerges, it may receive little attention (like Ordinals) or even be seen as noise. Therefore, keeping an open mind and trying every new trend (especially controversial ones) is the key to staying ahead of the curve.

Without real technological innovation, the narrative is just a short-lived speculative bubble.

This cycle is unique because its innovation (AI) comes from outside. Thanks to AI, we are seeing innovations like Kaito InfoFi and AI Agents.

Some examples of this cycle:

  • Ordinals

  • Restaking

  • AI Agents

  • InfoFi

  • SocialFi

  • ERC404

My goal is not to list all examples, but to build a mental model to identify them. The degree of innovation can be scored on a scale of 0 to 10.

Simplicity and memetic potential

Not all innovations are created equal. Some are easy to understand, others are not.

Complex narratives (e.g., zero-knowledge proofs, restaking) spread slowly, simple or memetic narratives (e.g., WIF) spread quickly. Can you explain this concept in 5 seconds? Is it a joke?

Example:

  • High Simplicity (10/10): AI, Memecoin,BlockchainXRP for Banks

  • Medium simplicity (5/10): SocialFi, DeFi, NFTs, Ordinals

  • Low simplicity (3/10): zero-knowledge proofs, modular chains, re-staking

Complex narratives take time to develop and their price increases more slowly. In addition, simplicity drives community growth.

Community

Bitcoin is the greatest innovation from 0 to 1, but without a community, it is just a piece of code. The value of Bitcoin comes from the story we give it.

People still don’t understand why Cardano or XRP are doing so well despite limited innovation, and the reason is: die-hard community.

Or to put it more radically: Memecoin.

There is no technological innovation involved, but Memecoin is now a $66 billion sector, all thanks to a community of people that have coalesced around the token.

The tricky part is calculating the size of a community: should we look at the number of followers on platform X, the popularity of topics on X, or the number of Reddit subscribers and posts?

Some communities are difficult to identify because they speak different languages or communicate on different channels, such as Korean users discussing XRP in local forums.

Kaito’s “mindshare” is an excellent metric, but the Loudio experiment shows that having a huge mindshare does not necessarily mean that a real community has been established.

叙事为王的时代,如何用评分模型找到下一个百倍叙事?

https://x.com/DefiIgnas/status/1929511567768363174

The best way to identify a real community, especially in the early stages, is to immerse yourself in it: buy a token or NFT, join a Discord or Telegram group, and see who is talking about it on X (not paid promotion). If you feel a real sense of belonging and connection, this is a strong bullish sign.

In my opinion, Hyperliquid is the fastest growing community. Binance and OKX's attacks on HYPE have only strengthened its cohesion, giving the community a mission and goal to support the team and the protocol. Hyperliquid has become a movement.

叙事为王的时代,如何用评分模型找到下一个百倍叙事?

https://x.com/DefiIgnas/status/1904923406325473286

I thinkInnovation and community are the most important factors, so a weight of 1.5 is assigned to both.

As with innovation, I added the same simplicity variable to the community factor: the simpler the narrative, the easier it is to spread.

Memecoin (like PEPE) is easy to understand, while Hyperliquid, while not as simple, has still managed to bring the community together.

Both Runes and Ordinals bring technological innovation (allowing for fungible tokens to be issued on Bitcoin, something that was once thought impossible) and have strong communities. So why are prices falling?

Because there is a third factor to consider.

fluidity

Innovation ignites narratives, communities build stories and beliefs, but liquidity is what allows you to ride the wave and reach the topSafetyFuel for exit. This is the difference between a sustainable wave and the last person to catch the wave when the music stops.

Casey Rodarmor, the creator of Runes, has done a great job building a fungible token model, but perhaps he should also build a Uniswap-like AMM pool on Bitcoin to keep Runes hot.

Runes Memecoin has trouble competing with Solana or Layer2 Memecoin because they lack passive liquidity pools. In fact, Runes is more like NFTs traded on Magic Eden: while there is good buy liquidity, there is not enough sell liquidity for large exits. Low trading volume cannot incentivize first-tier CEXs to go online.

NFTs also face liquidity issues. That’s why I had high hopes for the ERC404 NFT fragmentation model, which would have provided passive selling liquidity and annualized returns through trading volume. Unfortunately, it failed.

I think liquidity is the main reason why DeFi options have had difficulty taking off over the years.

叙事为王的时代,如何用评分模型找到下一个百倍叙事?

https://x.com/kristinlow/status/1929851536965873977

I wanted to hedge my portfolio with options during the recent market volatility, but on-chain liquidity was terrible. I had high hopes for the crypto options platform Derive, but its future is now uncertain.

Liquidity is not just about deep order books, constant inflows of new funds, CEX listings, or high TVL in liquidity pools, which are certainly important. Liquidity in the formula also includes protocols that grow exponentially as liquidity increases, or projects with built-in liquidity bootstrapping models, such as:

  • Hyperliquid: More liquidity means a better trading experience, attracting more users, which in turn brings more liquidity

  • Velodrome’s ve3.3 DEX: Building liquidity through a bribery mechanism

  • Olympus OHM: Protocol Own Liquidity

  • Virtuals DEX: Pairing the release of new AI agents with the VIRTUAL token

Tokenomics

Token economics is as important as liquidity. Bad token economics can lead to sell-offs. Even with deep liquidity, the continued selling pressure from unlocking is a huge risk.

Excellent cases: high circulation, no large VC/team allocation, clear unlocking plan, destruction mechanism (such as HYPE, well-designed fair launch), etc.

Bad cases: hyperinflation, large-scale cliff unlocking, no income (such as some Layer2 projects).

A narrative that scores 10/10 for innovation but 2/10 for token economics is a ticking time bomb.

Incentives

Incentives can make or break a protocol, or even an entire narrative.

The restaking narrative relied on Eigenlayer’s performance, but a failed token launch (perhaps due to a complex narrative or a weak community) caused that narrative to stagnate.

Assessing liquidity early in a narrative is challenging, but innovative incentives can help build liquidity.

I’m particularly interested in new token issuance models. If you’ve read my previous posts, you’ll know what I mean: markets tend to shift when tokens are issued in innovative ways.

  • BTC hard fork → Bitcoin Cash, Bitcoin Gold

  • ETH → Ethereum Classic

  • Initial Coin Offering (ICO)

  • Liquidity mining, fair launch, low circulation and high fully diluted valuation (FDV, suitable for airdrops but not good for the secondary market)

  • Integral Narrative

  • Pump.fun

  • Private sale on Echo/Legion – Public sale

As the market changes, token issuance and incentive mechanisms are also evolving. When an incentive model is overused and its rules are widely known by the market, it means that the market has entered a saturation stage and the peak of hype.

The latest trend is cryptocurrency treasuries, where public companies buy cryptocurrencies (BTC, ETH, SOL) at a price that exceeds the value of the crypto they hold.

What are the incentives here? Understanding this is crucial to avoid becoming a scapegoat.

Market Environment

The best narratives launched during a brutal bear market or macro risk event (like an early tariff war) can also be drowned out. Conversely, in a bull market with easy liquidity, even ordinary narratives can soar.

The market environment determines the following multipliers:

  • 0.1 = Brutal bear market

  • 0.5 = volatile market

  • 1.0 = Bullish

  • 2.0+ = Parabolic Frenzy

Case: Runes (April 2024) has innovation, community, initial liquidity and certain incentive mechanisms, but it was launched at a time when the market began to fall sharply after the hype of Bitcoin halving subsided (market environment multiplier ~0.3). Result: mediocre performance. If it was launched 3 months earlier, it might have been more effective.

How to use the formula

Rate each factor on a scale of 1-10:

  • Innovation: Is it a breakthrough from 0 to 1? (Ordinals: 9, Memecoin: 1-3)

  • Community: True believers or speculators? (Hyperliquid: 8, VC-led projects: 3)

  • Liquidity: How deep is the market? (Quickly launched on first-tier CEX: 9, trading Runes such as NFT: 2)

  • Incentive mechanism: Is it attractive and sustainable? (Hyperliquid airdrop: 8, no incentive: 1)

  • Simplicity: Can it become a meme? ($WIF: 10, zkEVM: 3)

  • Token Economics: Is it Sustainable? (BTC: 10, 90% Premine: 2)

  • Market environment: bull market (2.0), bear market (0.1), neutral (0.5-1)

Scoring is subjective. I gave Runes a 9 for innovation, but you might give it a 5. This formula is just a suggestion of factors to consider.

Take Runes as an example:

Innovation = 9, Community = 7, Liquidity = 3, Incentives = 3, Simplicity = 5, Token Economics = 5, Current Market Environment = 0.5

Substituting into the formula:

  • 1.5 × Innovation × Simplicity = 1.5 × 9 × 5 = 67.5

  • 1.5 × community × simplicity = 1.5 × 7 × 5 = 52.5

  • Liquidity × Token Economics = 3 × 5 = 15

  • Incentive Mechanism = 3

Subtotal = 67.5 + 52.5 + 15 + 3 = 138

Multiply by market conditions (0.5):

Runes Narrative Rating = 138 × 0.5 = 69

In comparison, Memecoin scores higher on my subjective scale (116):

  • Innovation = 3 (not completely zero because Pump.fun innovates its distribution model)

  • Community = 9

  • Liquidity = 9 (integration into AMM, high trading volume = high LP income, CEX online)

  • Incentive Mechanism = 7

  • Simplicity = 10

  • Token economics = 5 (Issuance means 100% circulation, no VC, but there is a small group risk/rush purchase, no revenue sharing)

  • Market Environment = 0.5

Summarize

  • Scan the narrative early: Use tools like Kaito and Dexuai to focus on innovation and catalysts

  • Strict scoring: Assess truthfully. Bad token economics? In a bear market? Lack of incentives? The market environment changes at any time, and new field-native innovations may revive the narrative (such as Runes' AMM DEX)

  • Exit before incentives decay: Sell at the peak of token release or when airdrops land

  • Respect the trend: Don’t fight against the macro trend. Hoard cash in a bear market and deploy funds in a bull market

  • Keep an open mind: try out protocols, buy popular tokens, participate in community discussions… learn by doing

This is just version 1.0 of my formula, and I will continue to improve it.

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