- Qiao Wang critiques L1s, citing lack of strong market moats.
- Haseeb Qureshi defends L1s, emphasizing their exponential growth potential.
- Debate highlights differing views on Layer-1 blockchains’ long-term value.
The ongoing debate over Layer-1 (L1) blockchains reached a boiling point this week as two prominent figures in the crypto world presented opposing views on the future of these blockchain protocols. According to Qiao Wang, co-founder of Alliance DAO, the majority of L1 tokens lack enduring strengths and are headed for obsolescence. On the other hand, Haseeb Qureshi from Dragonfly Ventures published an essay defending the long-term value of L1s, emphasizing their crucial role in the evolution of crypto.
Wang’s viewpoint hinges on the belief that L1 blockchains are fundamentally weak because they lack strong “moats.” He argues that, unlike traditional businesses with high switching costs, blockchain networks are relatively easy to replicate. Developers can shift their applications from one blockchain to another with little resistance, and creating a new blockchain has become more accessible than ever.
Wang points to the rapid pace at which blockchain projects launch, seeing many L1s as interchangeable and vulnerable to competition. He contrasts this with the success of Amazon Web Services (AWS), where high integration and switching costs built a defensible moat.
For Wang, this lack of lock-in makes L1s less compelling as long-term investments. He maintains that while they are not bad assets, L1s fall short when compared to more defensible tech companies.
Instead of holding these tokens, Wang believes investors should focus on blockchain projects that have integrated both the blockchain and application layers, like Solana and Base, which he sees as potentially more sustainable in the future.
Also Read: Massive Surge in XRP Transactions: What’s Behind the Spike?
Contrasting Views on Blockchain’s Future Potential
In contrast, Qureshi’s essay, “In Defense of Exponentials,” reflects a much more optimistic outlook on the future of L1s. He contends that the crypto space, though volatile, is still in its infancy. According to Qureshi, the exponential growth potential of general-purpose blockchains will ultimately justify large valuations.
He draws parallels between current skepticism toward blockchains like Ethereum and Solana and the doubts that Amazon faced before its success in e-commerce.
Qureshi believes the current attitude toward L1s overlooks the bigger picture. Rather than focusing on short-term market fluctuations or traditional valuation metrics like price-to-earnings ratios, Qureshi argues that the long-term view should be that crypto infrastructure has the potential to revolutionize global financial systems.
L1s may appear undervalued today, but if blockchain technologies eventually support a significant share of global capital flows, their true value will become clear.
While Wang and Qureshi’s perspectives differ sharply, they highlight an ongoing divide in the blockchain investment community. Wang’s view is grounded in a cautious, investor-centric approach focused on defensibility and sustainable value capture.
Qureshi, however, advocates for an expansive, long-term vision where L1s play a foundational role in the digital financial ecosystem. Both perspectives underscore the uncertainty that continues to surround Layer-1 blockchains as the industry matures.
Also Read: Bitwise Solana ETF Sees Pause in Inflows After Weeks of Strong Performance
