Reviewing SATO: Ethereum ecosystem's long-awaited pure technological innovation

Following Unipeg, another eye-catching project has appeared on Ethereum: SATO.

We know that Bitcoin’s maximum supply is 21 million coins.

According to its operating principle, in about 100 years, all Bitcoin will be mined. But in reality, well before 100 years, when Bitcoin block rewards become very close to zero, Bitcoin’s issuance is already approaching zero. At that point, we can basically consider Bitcoin to be nearly fully mined.

By then, Bitcoin’s block rewards will be very small, and the main incentives for miners will come from the network’s transaction fees.

All of these are theoretical projections based on algorithmic reasoning; but how will its actual trend and operation look?

Most of us in this generation probably won’t see it happen.

But now, someone has used algorithms to approximate this scenario on Ethereum, and we will soon see the results of this theoretical projection.

This project is SATO (sat0.org).

It is an ERC-20 token issued on Ethereum. Its maximum supply is 21 million coins. People can “mine” it (buy it) on Uniswap. This project has no airdrops, no pre-sales, no private key control, and all funds are in liquidity pools.

Anyone who wants to participate or exit can buy or sell on the official website (which is essentially a Uniswap V4 Hook).

Many believe this mechanism is similar to Bitcoin, where as participants keep “mining” coins, the remaining coins become fewer and fewer, and for the same amount of ETH paid, the coins received will decrease over time.

In this case, it resembles Bitcoin’s decreasing block rewards.

But I think, more accurately, it is a social practice implemented in a smart contract that locks the issuance cap and ensures fair distribution.

At first glance, when I saw this project, I didn’t immediately think of Bitcoin, as many online discussions do. Instead, I thought of the inscriptions that once became hugely popular on Bitcoin.

The inscriptions’ popularity was driven by a deeply resonant and widely accepted idea: fair issuance — even the project team cannot leverage technical means to monopolize advantages just because they are the ones issuing the project; they must mine coins on-chain using the same rules as everyone else.

This approach was a significant challenge to the ICOs that once flourished on Ethereum.

Because ICOs at that time were riddled with technical tricks, private key permissions, backdoors in transfers… All of these issues stemmed from the fact that the smart contract mechanisms then were not flexible enough to avoid such problems, making it easy for project teams to leave behind loopholes.

Inscriptions, thanks to Bitcoin’s minimalist technical architecture, were easier to implement fairly distributed issuance. But, as the saying goes, “success has its pitfalls,” and because of this simplicity, they could only achieve fair issuance, but struggled to realize other complex functions, such as more advanced and derivative transaction scenarios.

Uniswap V4’s Hook mechanism solves these issues. This mechanism allows users to set complex custom rules within smart contract transactions, enabling the creation of mechanisms that were previously unseen or difficult to implement flexibly.

SATO is exactly like that.

It successfully leverages the advantages of the inscriptions technique through the Hook mechanism, fully simulating the “fair issuance” of inscriptions on Ethereum.

The earlier introduced Unipeg is also based on this concept.

It also uses the Hook mechanism to design a new token scenario that combines features of NFTs and ERC-20 tokens.

Within just a few days, the Hook mechanism in Uniswap V4 has launched two projects that have gained significant attention, sparking two innovative developments.

Such a situation has not been seen in the Ethereum ecosystem for a long time.

Uniswap V4’s Hook was officially launched last January.

I remember many articles at that time simply regarded it as a technical innovation. Although people were excited and hopeful about it, for a long period afterward, few paid attention to or followed it closely within the ecosystem.

After more than a year of incubation, it is finally beginning to show its potential.

I very much look forward to this wave of innovation and momentum continuing to rise wave after wave.