L1 已死，Appchain 当立

Author: iwillpat

Translation: Jiahui, ChainCatcher

Since the era of “Rollup as a Service” (RaaS), the ending has already been predetermined. This is a sign of execution layer falling into a death spiral and commodification.

What I mean is that general L1 tokens will continue to trend toward zero, and probably without exception. I will try to explain why, 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 industry “leadership.”

I will briefly elaborate on these points—these are just personal opinions, not definitive conclusions.

The current linear staking release has some benefits, such as distribution through liquid staking (“My 7% APY!”), but it fails in several key aspects.

Delegated Proof of Stake (DPoS) makes it easy for those armchair “decentralization fundamentalists” to participate in network security, but it doesn’t properly incentivize insiders, users, and developers. At best, it only encourages holding tokens, which does nothing to create real value.

I’ve heard the classic argument about PoS: large validators have economic incentives not to dump on you. But that hasn’t stopped them from selling every unlock tranche and block reward possible.

This leads to my next point: they sell because L1 tokens lack long-term value propositions.

A “tissue” that tears easily

The rhetoric around “gas tokens” and “governance” is old and unconvincing—like two sheets of Bounty paper towels, one splash and they fall apart. The value of network tokens depends on what you can buy with them.

Therefore, all blockchain teams should aim to promote their tokens as widely as possible as a medium of exchange. In the pursuit of higher TPS and lower block times, the industry’s vision of “peer-to-peer electronic cash” seems to have been lost.

To be blunt: throughput, TVL, and low latency do not give tokens any value. Liquidity and usage do.

The most tangible and painful point is: blockchain “labs” (and various foundations).

Lock-up periods end and they dump, OTC deals at steep discounts, staggering operational expenses, incentive schemes attracting hot money, hiring “KOLs”… we can all name a few.

Ultimately, every penny spent by labs is a tax on token holders. Unless the labs generate revenue through some service, a first-party wallet, or an application, they are just surviving by selling tokens.

This isn’t necessarily bad—labs provide valuable services through engineering resources, browsers, and APIs. But if labs don’t bring net new buying pressure to the token, and their expenses keep rising unsustainably, they will slowly bleed out and die.

One of the primary goals of labs should be to build a permissionless, independently operating system through “de-risking tests.” Ultimately, business expansion should be community-driven, with the network having its own “CTO” in spirit.

Achieving this doesn’t require 400 employees—30-40 talented people are enough, plus those developing first-party apps and services.

Finally—after saying all this, I want to share my “solution”—cryptocurrency has been led astray by many large capital allocators and advisors.

Setting aside FTX, Celsius, and Luna, we’ve been force-fed by the industry’s biggest players: short-term narratives, over-leverage, “maximizing extraction,” like forcibly feeding a sad, bloated retail turkey.

Promoting TPS above smart contract security, investing in the 10th general blockchain, raising funds at absurd valuations, raising far more than needed, claiming nonexistent security advantages… these are classic symptoms of serious crypto idiocy.

Making bold bets on industry directions—like privacy coins, MoveVM, tokenized IP, decentralized social—is one thing.

But burning money into another idiotic hype or short-term money grab—like RaaS, data availability, L1s that launch tokens with unicorn valuations before having a product, or infrastructure solutions for crypto issues that don’t generate revenue or even exist—are entirely another.

(Disclaimer: I don’t claim to be an investment genius, but I understand basic math. Buy volume must exceed sell volume.)

Where is the road leading?

Next, I’ll briefly discuss where the industry should go.

We need new L1 token models and a radically different approach to crypto VC. The current “low circulation, high FDV” paradigm can still operate when valuations are low and incremental capital flows in.

But retail investors no longer want to buy seed rounds at 1,000x valuations at TGE, nor do they want to endure massive unlocks and insider staking rewards 12 months later.

L1s don’t need hundreds of millions to launch mainnets—unless I missed something. Just enough funds to build the platform and go to market, then continue raising if needed; everyone would be better off.

Token unlocks should be tied to milestones like CEX liquidity, payments, and DeFi lending, and on-chain governance should be prioritized higher. Foundations should maintain at least transparency in their balance sheets, expenses, and investments.

Retail investors don’t want to pay for network security (i.e., validator rewards). Ultimately, the network should sustain itself without relying on any staking rewards.

Maybe staking rewards shouldn’t have existed from the start; instead, the network or labs’ revenue should go directly to validators. When that happens, watch how hard validators will work.

As value flows less and less to the base layer, we shouldn’t be investing so heavily in their development. Gas fees on all chains are trending toward zero, successful applications are migrating to their own chains, and cross-chain bridging has never been easier.

So, you might conclude: it’s best to first build an application (or application chain), then vertically integrate—like Hyperliquid, Pump, and others are doing.

I’m not saying stop investing in general-purpose blockchains, but I do believe the core function of network tokens should ultimately be a genuinely useful medium of exchange—permissionless L1s should be liquidity hubs for DeFi and testing grounds for new applications.

These aren’t new ideas. I think many L1 teams already realize: to survive, they need to build their own applications and services. Foundations relying on token sales to keep running are slowing down.

If you’re working in these teams on work that doesn’t generate revenue, you might want to start thinking about what value you can create.

Interestingly, retail and institutional users still seem to prefer building a strong holder community and keeping them happy over just using the network. When in doubt, ask the community.

Even if their suggestions are terrible, at least ask who they like and dislike most in your team.

I’ve hesitated for weeks whether to publish this article. It’s not a well-structured thought piece; more like a bunch of ideas that came up during a shower.

My point is: all L1s are making the same serious mistakes, only the luck and timing differ. The projects that perform best tend to survive because of stronger leadership and faster delivery, but the fundamental issue of sustainable value propositions remains unresolved.

We can continue down this long, painful path of value extraction, watching BTC die-hard fans and hoarders keep outperforming the market; or we can admit the flaws in the current L1 model and start building toward slightly fairer outcomes.