Layer 1 Thesis and Newcomers, Part 1

upcoming blockchains, design trends and reasons

‘Sell the event’ is very true - in a bear market, Ethereum’s price rose in anticipation of the Merge, formed a head and shoulders, and tanked downwards after 15 September, even though the Merge was successful!

Transaction fees didn’t go any lower though - that’s not what the Merge does. Interestingly, (Ethereum) gas price could be a good predictor of bull/bear markets.

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Layer 1 Investment Thesis

The success of the Merge temporarily makes competing EVM-compatible chains (BOBA (renamed from OmiseGo OMG), FTM, ONE, maybe even L2s like MATIC) less relevant, as Ethereum now has capability for more transactions.

But just like computers get faster every year and the software gets slower, usage will always grow to fill capacity.

What Andy (Grove, of Intel) giveth, Bill (Gates of Microsoft) taketh away

common saying during the 90s

There will always be a demand for more throughput with low (enough) transaction fees.

Let us not forget how governments, led by the US’s example on crypto policy, are cracking down harder. Already Huobi Exchange has delisted several privacy coins preemptively such as DCR, GRIN, BEAM.

The demand for privacy will grow as government pressure increases, and big organizations might want to keep their smart contract activity private.

New L1s to look out for