Written by: Jaleel, BlockBeats

In the past few months, Bitcoin has repeatedly hit new highs, and BRC20's ORDI and SRC's STAMP in the Bitcoin ecosystem have also broken new highs, with remarkable performance. On the other hand, ATOM, the leader of the highly halal Atomicals protocol, has been under a haze, with prices continuing to decline, and the mood of the holder community is not very good.

Although ATOM has landed on Unisat and OKX Web3 wallets, and has been listed on trading platforms such as Gate and Bitget, the price of ATOM has been stumbling downward since its high of $16 in December last year. As of the time of writing, the price of 1 ATOM is $6.478, and the price of one ATOM is $6,483. Based on the peak price of $16, ATOM has fallen 62% in the past four months.

What has happened to the Atomicals ecosystem? How is the development of AVM progressing? BlockBeats wrote this article after in-depth exchanges with several developers and enthusiasts in the Atomicals community.

The Ceiling of Atomicals

In the early stages of Atomicals, almost no one discussed AVM.

Until this year, Arthur, the author of the Atomicals protocol, has been working on the development of the "split" function. We have also observed that the price of ATOM tends to rise with the progress of the split function. It can be seen that community members who hold positions early have high expectations for the split function. Under ideal planning, once ATOM is split, the transaction volume and the number of addresses will increase significantly, so that it can be listed on the trading platform as soon as possible.

However, before the split, the liquidity of ATOM was like an expensive NFT or a real-life luxury house, which was difficult for ordinary people to afford. Even now, the price of a single ATOM is as high as six thousand US dollars, and there are only two thousand holding addresses.

Although we can see that Gate, Bitget and OKX Web3 wallets have launched ATOM in the past few months, first-tier trading platforms such as Binance and OKX have not yet listed the coin. Whether from the perspective of transaction volume or holding addresses, first-tier trading platforms seem to lack the motivation to quickly promote the listing of ATOM.

The shortest way may also be the longest way

Since it is so important, why has the split function not been launched yet, but has turned to the development of AVM?

Wizz Wallet is the earliest wallet in the Atomicals ecosystem and the most frequently used wallet in the Atomicals community. They have frequent private communications with the protocol author Arthur. Wizz Wallet CEO Brutoshi told BlockBeats that most of the "split" code has actually been launched on the test network, and it can now be understood as a suspension.

As for why the implementation of splitting was postponed in favor of AVM, Brutoshi also gave his own understanding: "Before AVM, if you want to implement splitting, you need to write a lot of code logic in the indexer, although doing the splitting function alone can also solve the problem. But doing so will result in a huge and complicated code being hard-coded, and there will be a lot of maintenance, testing and promotion in the future, including the wallet side and the market side, which will require extra energy to support, which is very inelegant."

Every public chain or every protocol has its own synonym. For the Atomicals ecosystem, elegance, simplicity, non-redundancy and halal are some key words.

Both options are feasible. From the perspective of realizing the benefits of holders, implementing the splitting function alone first may be the fastest solution, but for the Atomicals ecosystem that Arthur wants to build, this is not the best choice. The seemingly closest road may also be the farthest road.

Arthur turned to AVM not because the split function was impossible to implement, but because of the pursuit of a more elegant and concise solution. The advantage of doing this is that the energy spent by everyone in the ecosystem is not wasted on solving a single specific problem, but is applied to a wider range of general problems.

"AVM is programmable and has its own scripting language. If you split it on it, a piece of code can solve it." Brutoshi added. It can be said that after implementing AVM, the split function is a natural thing.

Although the ceiling of AVM is very high, in the long idle period of these months, holders who attach more importance to liquidity and need to realize it quickly and do not control the position adjustment well have chosen to leave first. In the crypto industry where liquidity is king, time is calculated in multiples, and investors in the crypto industry are often more impatient.

"The user portraits of the big holders who minted ATOM in the early stage are very clear. Most of them are a group of people who can understand technology and code. Most of the people who minted ATOM in the early stage have sold their products." The philanthropist in the currency circle is a fan of the Atomicals ecosystem and is frequently active in the community. After long-term observation, he said this to BlockBeats.

What can AVM do?

Amid the disagreements of many communities, AVM represents the ceiling of the entire Atomicals ecosystem, which has become a general consensus in the community. So, what can this AVM, which represents the ceiling of Atomicals, do?

On December 13, 2023, Arthur, the author of Atomicals Protocol, accepted an interview invitation from Ordinal Revolution Podcast, and shared the recent developments of Atomicals Protocol and his views on the Bitcoin ecosystem in the interview room without showing his face.

In the interview, Arthur briefly introduced the Atomicals Virtual Machine (AVM). As a Turing-complete virtual machine, AVM is able to execute various computing instructions required for complex blockchain applications, including enabling developers to create smart contract programs on Bitcoin and create unprecedented experiences.

Interview room screenshot

"With AVM, many possibilities are available, including implementing the previous historical legacy problems in a more elegant way." Brutoshi said.

So, what possibilities can AVM create? According to the introduction of Atomicals community enthusiast @PunkOnChain on Twitter, its breakthrough points are: AVM will have an advanced execution environment that can handle smart contracts and dApps; a custom instruction set for enhanced performance to reduce Gas costs; optimize state transition functions, increase parallel processing capabilities to improve throughput and scalability; achieve interoperability and cross-chain communication; and provide a developer-friendly interface.

For those who cannot understand the technical theory, it can be simply understood as: AVM will make Atomicals have a smarter brain and a supercomputer capable of performing various tasks; a special toolkit makes complex tasks easier, more time-saving and labor-saving; have a very smart manager who can keep everything in an orderly manner; have a translator who can communicate with other communities, making communication between the Atomicals system and other systems more convenient; and have an extremely practical tool book that can help developers learn how to use AVM faster.

"I am optimistic about ATOM for many reasons, but the most important point is that I think ATOM has limited downward space, and at the same time, ATOM has unlimited upward space." Atomicals ecosystem enthusiast and philanthropist in the currency circle told BlockBeats.

In his opinion, it is not excessive for Dragon II Atomicals to account for 10%-20% of the market value of Dragon I Ordinals. After AVM was developed, the entire Atomicals ecosystem was expanded, at least comparable to Ordinals, and there is no upper limit in the long run. For an Atomicals that can issue both FT and NFT, coupled with the Realms system that allows users to attach their avatars, names, and links to their online profiles, once AVM is truly realized, the height of the ceiling will not be underestimated.

"Closed-door development"

In the discussion around AVM, we can also hear many community members questioning how Arthur implemented AVM. And the most important question is, when will AVM be online?

In some public messages, we captured some signals. Wizz Wallet CTO Neeboo revealed at a Space event that the protocol authors expect to launch the first version of AVM around the time of Bitcoin halving, which is around late April.

On March 19, Atomicals enthusiast 0xSea said on social media that he had talked with Arthur about the progress of AVM: "The alpha version of AVM is coming soon. The specific time is uncertain, but it should be soon. It is not much different from what Neeboo revealed on Space before, "Available version will be launched before halving." After AVM goes online, it will easily support staking, lending, deposits and other functions of ARC-20 assets. Based on AVM, ARC-20 assets can be deposited in smart contracts, similar to Ethereum's ERC-20 tokens can be deposited in Solidity contracts."

Whether the development of AVM is done behind closed doors is a subjective point of view. But it is undeniable that compared with the general protocol founders, Arthur does prefer to hide himself behind the Atomicals protocol.

Since announcing the start of the design work of AVM in January, Arthur has not made any documents public. Although he has revealed the design concept of AVM on Twitter, Arthur has not made any documents public, which makes community users a little worried. In contrast, Casey has released the Github of the final implementation version of Runes yesterday.

Neeboo said on Twitter Space in early March: "I haven't seen the original design documents and some of the initial code yet." However, according to Wizz Wallet's disclosure to BlockBeats, Arthur and them have a regular meeting every once in a while, and Arthur's communication with infrastructure such as wallets has lasted for a long time.

Each protocol has its own personality, which depends largely on the personality and values of the protocol author. Almost everyone who has come into contact with Arthur knows that Arthur has always called himself a scientist and technology researcher and has never thought about making a profit from it. During the meeting with Wizz Wallet, Arthur also made it clear that he had no financial needs when building the Atomicals protocol.

The official statement is that Atomicals has no team, no purpose, no practicality, no roadmap, no investment, nothing

Brutoshi said: "Arthur's pattern and values are very similar to Satoshi Nakamoto." He added: "Once the versions of Atomicals and AVM are stable, he may disappear. He is fully prepared for this. From being anonymous at the beginning, to using mixers for some interviews and voice conferences later, he attaches great importance to privacy protection."

This is also the reason why many community members have unconditional trust in Arthur. In addition to the recognition of his character and values, his technical ability is also an important reason.

“Initially, Arthur was inspired by Ordinals and wanted to implement some domain name-like functions on Ordinals. After trying for about two months, he felt that it was not feasible and Ordinals could not support it. Later, he thought about it and simply started over. It took him about six months to redevelop the entire protocol. He has very strong technical capabilities and is very familiar with the Bitcoin protocol.” Brutoshi told BlockBeats.

According to Brutoshi, Arthur had participated in the development of mining pool projects and had a special liking for PoW, which is why the Atomicals protocol pioneered the BitWork token issuance mechanism based on PoW.

Back to the criticism of some community members that the Atomicals protocol was "closed-door", after a recent regular meeting between Wizz Wallet and Arthur, Arthur seemed to realize this and updated the protocol's development progress and plans on social media yesterday. According to the official Atomicals Protocol Twitter upcoming protocol update plan, the goal is to allow the transfer of tokens with a dust limit of less than 546 satoshis. The update aims to address the BTC protocol's limit on the minimum transfer size, which was originally intended to avoid "spam attacks" on the Bitcoin blockchain. Since ARC20 uses a pure color coin scheme, it is also affected by this dust limit, making it impossible to transfer tokens smaller than 546 units.

The solution is to allow partial coloring of UTXOs, but not more than the total number of units in the UTXO, which complies with the principle of 1 coin ≥ 1 satoshi. This technical solution has three major advantages: first, at least 1 token unit can be sent, which effectively solves the community's main concerns about the protocol; second, it can significantly reduce the accidental destruction of tokens; and finally, it improves the flexibility and reliability of smart contracts through the Atomicals Virtual Machine (AVM). Neeboo said that it is necessary to add that "partial coloring technology is still expected to be implemented using contract capabilities in Arthur's plan, rather than adding rules directly to the indexer."

This protocol update is expected to be completed in a few weeks and will be synchronized with the release of the AVM. The Atomicals protocol has always maintained its commitment of 1 token = 1 satoshi (or more). After the update, the open source developer team will work on a beta version to steadily integrate the technology while ensuring that the industry has enough time to test and reach consensus.

The transformation of the main battlefield of chip structure

In the communication with BlockBeats, the philanthropist in the currency circle mentioned his investment insights on the chip structure: "The chip structure is the most important analysis angle, and the chip structure can determine the direction of the market. Before buying, you must think clearly about who will eventually hold these chips? When the chips flow into the hands of more powerful people, the market can really take off. If these chips are concentrated in the hands of scientists who minted them in the early stages, then the prospects for this project are not great."

In order to study the holding data and specific chip distribution of ATOM, BlockBeats investigated the wallet addresses of the top 100 Atom holders in the Atomicals Market.

Among the top ten ATOM holding addresses, there are no holders based on "casting". Observing the top 20 ATOM holding addresses, it is found that only the address ranked 12th is "casting". Between the 20th and 30th, only the address ranked 29th is "casting"; and between the top 30th and 40th, there are no holders based on "casting".

Continue to observe, there are no holders based on "casting" between the top 40 and 50. Between the top 50 and 60, only the address ranked 59 is "casting", between the top 60 and 70, only the addresses ranked 63 and 65 are "casting", between the top 70 and 80, only the address ranked 73 is "casting", and between 80 and 90, there are no holders based on "casting", and finally, among the top 100 holders, only the address ranked 93 is "casting".

Among the top 100 holders, there are 6 addresses that own ATOM through "casting". The number of holders based on "casting" has decreased significantly. This indicates that early holders have reduced their holdings of ATOM or transferred their holdings.

Whether it is "changing hands" or "washing the market", it is clear that ATOM's liquidity and market influence have changed significantly, and the main battlefield has begun to shift.

Looking back at ORDI, both the price trend and community sentiment are very similar. "ORDI was really dead from June to September, and there was no difference between it and death." The philanthropist in the currency circle recalled the situation at that time. The ORDI community at that time, like the ATOM community today, experienced many moments of torment and pessimism.

After the launch of the GATE trading platform in May 2023, the price of ORDI reached a previous high of about US$25. However, in the following four months, the price of ORDI experienced a long period of downturn, falling to US$2.86 in September 2023.

Until it was launched on Binance on November 7, 2023, the price of ORDI climbed to more than $50. Then after the Bitcoin ETF was passed in January this year, no one doubted that it was a bull market. The price of ORDI peaked again in March 2024, setting a record high of $96.17. The holders who can really get the highest point of $96.17 from the initial minting of ORDI are definitely a minority among the minority, and it can even be said that it is rare. It is a very normal process to have a very low turnover period.

"But it is precisely because of the consensus formed and the explosive power in this process that the project can really take off. Those who lack confidence can leave the market as soon as possible and sell as soon as possible, so that more people have the opportunity to get on board." Brutoshi said. "Different opinions lead to different long and short investment decisions, which is a normal and healthy market behavior. Changing hands is a good thing."

Compared to ORDI's four-month downturn, it fell from $25 to $2.86, a drop of 88.56%. ATOM fell from $16 to the current $6, a drop of about 62.5%. In comparison, ATOM's drop is not too high. Recalling last November, inscription was almost a "national sport", with hundreds of inscription projects on various chains, but only a handful of them can really "survive" to this day.

“From January to March this year, the protocol authors have been studying AVM. It is definitely unrealistic to expect AVM to come out immediately and raise the price.” Although the philanthropist in the cryptocurrency circle has always suspected that someone is suppressing the price of ATOM, he also admitted that there is a possibility that ATOM is not favored by capital, “but what I can be sure of is that there is room only when there are differences in the market.”