Chainfeeds Summary:
Encryption will only ever be a minor issue in the world, a side play. It has never won, nor was it ever a certainty.
Article source:
https://x.com/hosseeb/status/1994110900454949263
Article Author:
Haseeb Qureshi
Opinion:
Haseeb Qureshi: In 2024, I felt I was opposing "financial nihilism." Financial nihilism is: these assets are completely unimportant, they're all just memes in the end, and everything we build is essentially worthless. Thankfully, that sentiment has passed. We've broken free of that curse. But today's zeitgeists, I call "financial cynicism": Okay, maybe these things have value, maybe they're not all memes, but they're severely overvalued, it's only a matter of time, and Wall Street will eventually see through us. Not that all chains are worthless, but these things are probably only worth one-fifth or one-tenth of what they are now, and you'd better pray Wall Street doesn't reveal its hand to us, because once it does, it'll all be wiped out. Late last year, Solana proudly embraced REV—a metric that could finally justify their valuation. They announced: We—and only we—are no longer bluffing Wall Street. The result, of course: REV collapsed shortly after being officially embraced (although ironically, SOL performed much better than REV). Next came the launch of Hyperliquid. A DEX with real revenue, buybacks, and a P/E ratio. Hyperliquid, Pump, Sky—these high-buyback tokens are great. But the market can always invest in exchanges. You can always buy Coinbase, BNB, or others. We ourselves hold $HYPE, and I think it's an excellent product. But that's not why people invest in ETH and SOL. L1 doesn't have exchange-like profit margins, and that's not a reason people buy them—if they wanted that, they'd buy Coinbase stock. So if I weren't criticizing blockchain financial metrics, you might think I was here to condemn the original sin of the "token industry complex." What I really want to write is: CT seems to have lost faith in the value of chains. I don't think it's because they don't believe new chains can capture market share. Solana was practically a wasteland two years ago, and now it dominates market share. That's difficult, but certainly possible. It's more like: people believe that even if a new chain wins, there's no worthwhile prize to be won. If $ETH is just a meme, and if it will never generate real yield, then even if you win, you can't possibly be worth 300 billion. The competition isn't worth winning because these valuations are fake; the market will collapse before you even claim your prize. Optimistic valuations of blockchains are outdated. That doesn't mean there aren't optimists—of course there are. Behind every seller are buyers. Even though CT trendsetters like to criticize L1s, people are still willing to buy SOL at 140 and ETH at 3000. But there's a feeling now: the smartest people aren't buying smart contract chains anymore. Smart people know the good times are over. Not now, but soon. The buyers here are fools—Uber drivers, Tom Lee, and KOLs who say "trillions." Maybe the US Treasury. But not smart money.
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