L1 dead, Appchain, stand by

Author:iwillpat

Other Organiser

Since the age of "Rollup is service" (RaaS), the end has been doomed. This is a precursor to the death spiral and commercialization of the executive layer。

I MEAN, THE COMMON L1 TOKEN WILL CONTINUE TO BE ZERO, AND IT MAY BE WITHOUT EXCEPTION. I'LL TRY TO EXPLAIN WHY AND HOW I'D CHANGE MY COURSE IF I WERE AN OPERATOR OF L1。

THE MAIN DRIVERS OF THE L1 FAILURE ARE: LINEAR TOKEN RELEASE, FAILED VALUE PROPOSITIONS, POOR GOVERNANCE AND INDUSTRY LEADERSHIP。

I will briefly elaborate on those points — those are personal points, not conclusive ones。

There are some advantages to the linear nature of the release in its current form, namely, that it is distributed by mobile ( "My 7% annualization!"), but it fails in several key respects。

The DPoS has made it easy for the paper-talked "decentralised fundamentalists" to engage in cyber security, but it does not properly motivate people, users and developers. It is, at best, merely an incentive to hold tokens and does nothing to create any real value。

I've heard the classic argument about the PoS: that big certifiers are economically motivated not to mess with you. But this did not prevent them from selling each possible level of unlocking and block incentives。

THIS LEADS ME TO MY NEXT POINT: THEY'RE SELLING IT BECAUSE THERE IS NO LONG-TERM VALUE PROPOSITION FOR L1 COINS。

It's a paper towel 

"Gascoin" and "Governance" are old-fashioned and unconvincing -- like two Bounty paper towels, and it's gone. The value of network tokens depends on what you can buy with it。

THEREFORE, THE GOAL OF ALL BLOCK CHAIN TEAMS SHOULD BE TO PROMOTE THEIR CURRENCY AS WIDELY AS POSSIBLE. THE INDUSTRY'S VISION OF "POINT-TO-POINT ELECTRONIC CASH" SEEMS LOST IN THE PURSUIT OF HIGHER TPS AND LOWER OUTPUT TIME。

THE TRUTH IS THAT THE AMOUNT OF VOMITING, THE TVL AND THE LOW DELAY DO NOT GIVE ANY VALUE TO THE TOKEN. MOBILITY AND USAGE WILL DO。

And the next thing that's true and painful: the block chain Labs. (And foundations

THE LOCKOUT IS ABOUT TO RUN, BIG DISCOUNTS ON OFF-SITE TRANSACTIONS, HIGH OPERATING EXPENSES, INCENTIVE SCHEMES TO ATTRACT HOT MONEY, "KOL" EMPLOYMENT... WE CAN ALL SAY A FEW。

In the final analysis, every penny spent by Labs was taxed on currency holders. Unless the Labs generate income through a service, a first-party wallet or application, it survives by selling money。

This is not in itself a bad thing — they provide valuable services through engineering resources, browsers and API. But if Labs does not bring a net additional purchase pressure to the coin, and spending continues to climb unsustainably, it will slowly bleed to death。

One of Labs' primary objectives should be to build the network into a system that can operate independently without permission and through a "hand-out test". Ultimately, business outreach should be community-driven and the network has its own CTO in spirit。

This does not require 400 employees, 30 to 40 good people, plus those who develop first-party applications and services。

And finally — I'll share my solution after that — the encrypted currency has been diverted by many large capitalists and advisers。

Leaving aside the FTX, Celsius and Luna, we have been forced by the biggest players in the industry to fill our throats with short-term narratives, over-leveraging, "maximizing."。

THE PROMOTION OF TPS OVER THE SECURITY OF SMART CONTRACTS, INVESTMENT IN THE TENTH UNIVERSAL BLOCK CHAIN, FINANCING WITH A DISPROPORTIONATE VALUATION, RAISING FUNDS FAR BEYOND WHAT IS ACTUALLY NEEDED, AND CLAIMING SECURITY ADVANTAGES THAT DO NOT EXIST AT ALL ARE TYPICAL SYMPTOMS OF SERIOUS ENCRYPTION。

Bold bets on the direction of industry development are one thing — privacy coins, MoveVM, monetization IP, decentrization socialization。

But burning money into another ingenious windfall or short-term game of money is quite another matter: Raas, data availability, any valuation of L1 with a polyunicorn prior to the absence of the product, and provision of infrastructure solutions for encryption problems that do not exist or generate income

I don't call myself an investment genius, but I know basic math. The purchase must be larger than the sale

Where's the road

I'm going to talk briefly about where the industry should go。

WE NEED A NEW L1 TOKEN MODEL AND A COMPLETELY DIFFERENT CODED VC. THE CURRENT PARADIGM OF "LOW-FLOW, HIGH-FDV" ALSO WORKS WHEN VALUATION IS LOW AND INCREMENTAL CAPITAL INFLOWS OCCUR。

HOWEVER, THE OCCUPANT IS NO LONGER WILLING TO PAY 1,000 TIMES THE VALUE OF THE SEED WHEEL AT TGE, OR TO CARRY OUT THE ASTRONOMICAL UNLOCKING AND INTERNAL HOSTAGE-TAKING AWARDS IN 12 MONTHS。

L1 DOESN'T NEED HUNDREDS OF MILLIONS OF DOLLARS TO ACTIVATE THE MAIN NETWORK — UNLESS I MISS SOMETHING. IT WOULD BE BETTER FOR ALL TO HAVE THE FUNDS NEEDED TO BUILD UP THE PLATFORM AND MOVE TO THE MARKET AND THEN TO CONTINUE FINANCING。

Currency unlocking should be linked to milestones such as CEX liquidity, payments and DeFi lending, and chain governance should be given higher priority. The Foundation should maintain a minimum level of transparency in terms of balance sheets, expenditures and investments。

It's not like they want to pay for cyber security (i.e. certificationer incentives). The end network should be self-sustaining without any pledge incentive。

Perhaps the pledge incentive should not have existed from the outset and the proceeds of the network or Labs should be given directly to the certifying officer. And then, see how hard the certifier will be。

We should not invest so much in their development as they flow increasingly into the base. Gas fees for all chains are moving towards zero, successful applications are moving to their own chains, and cross-chain bridges have never been as easy。

So you can come to the conclusion that it's best to do an application (or a chain of application) and then vertically integrate — that's what Hyperliquid, Pump and so on。

I do not mean to stop investing in the universal block chain, but I do think that the core function of network tokens should ultimately be a truly useful exchange medium — the L1 without permission should be a mobility hub for DeFi and a testing ground for new applications。

THESE ARE NOT NEW IDEAS. I THINK MANY OF THE L1 TEAMS HAVE REALIZED THAT THEY NEED TO BUILD THEIR OWN APPLICATIONS AND SERVICES TO SURVIVE. THE FOUNDATION'S CASH-FOR-LIFE TREADMILL IS SLOWING DOWN。

If you're doing non-income work in these teams, you might have to start thinking about what value you can make。

Interestingly, it seems that it is far less important to build a strong host community and keep them happy than it is to use it extensively. When you're lost, ask the community。

Even if their advice is bad, at least ask who they love and don't like the most in your team。

I hesitated for weeks to send this article. It's not a piece of structured thought, more like a bunch of ideas coming out in the shower。

MY POINT IS THAT ALL L1S ARE MAKING EQUALLY SERIOUS MISTAKES, BUT THE DIFFERENCE IS BETWEEN LUCK AND TIMING. THE BEST-PERFORMING PROJECTS SURVIVE, OFTEN BECAUSE OF STRONGER LEADERSHIP AND FASTER DELIVERY, BUT THE ISSUE OF SUSTAINABLE VALUE CLAIMS REMAINS UNANSWERED。

WE CAN CONTINUE ON THIS LONG AND PAINFUL PATH OF VALUE EXTRACTION, WATCHING THE BTC'S DEAD LOYALISTS AND THE DEAF PARTY CONTINUE TO WIN THE GAME; OR, ACKNOWLEDGING THE CURRENT PROBLEM WITH THE L1 MODEL, WE BEGIN TO BUILD FOR A SLIGHTLY MORE EQUITABLE OUTCOME。