L1 is dead, Appchain should rise
Core Viewpoint
The crypto market does not need so many storytelling layer-one blockchains; what it needs are applications that can generate real income. Stopping the Ponzi scheme of staking rewards, cutting off the foundations that do not do real work, and returning to genuine demand is the only way for public chains to survive.Author: iwillpat
Compiled by: Jiahua, ChainCatcher
Since the era of "Rollup as a Service" (RaaS) began, the outcome has already been determined. This is a precursor to the execution layer falling into a death spiral and commoditization.
What I mean is that general L1 tokens will continue to trend towards zero, and possibly without exception. I will try to explain the reasons, and how I would pivot if I were an L1 operator.
The main drivers of L1 failure are as follows: linear token release, failed value propositions, poor management, and the industry's "leadership."
I will briefly elaborate on these points—these are just personal opinions, not conclusions.
The current form of linear staking release has some benefits, namely distribution through liquid staking ("My 7% annualized!"), but it has failed in several key aspects.
Delegated Proof of Stake (DPoS) makes it easy for the "decentralization purists" who talk a big game to participate in network security, but it does not properly incentivize insiders, users, and developers. At best, it only incentivizes people to hold tokens, which does nothing to create any actual value.
I have heard the classic argument about PoS: large validators have economic incentives not to dump on you. But that hasn’t stopped them from selling off every possible unlock amount and block reward.
This leads to my next point: they sell off because L1 tokens have no long-term value proposition.
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Risk warning
