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We call this industry “Blockchain” industry. But people are fed up with too many chains.
If you launch a new channel in 2025, expect a lot of skepticism on Twitter. This is what all that the L1 blockchain raises last week had to face.
- Camp Network, an L1 intellectual property, raised $ 30 million to an evaluation of $ 400 million.
- Up to an L1 based on SVM, $ 14.4 million raised an evaluation of $ 140 million.
- Miden, a Rollup ZK, raised $ 25 million (unknown evaluation).
“Another channel, why?”
The simplest explanation is “greed”. It is the legendary L1 Premium!
Look at the following prices performance in recent times-what explains a token of $ 6.8 billion in the event of a capo-market which doubles almost half a-hen?
We can all agree that it is not based on fundamentals. The costs generated on suis are in lean stockings compared to its tops last December.
Maybe I’m picking cherries and sui is an anomaly. Maybe the L1 bonus is dying, but it’s not yet quite dead.
Until then, the incentives to launch new L1s still exist.
The second explanation (and charitable) is simply that the chain launching founders have competing visions of the way a chain must be optimized.
How to design the execution environment? How is Mev captured? What layer of data availability to be used? Should there be a standardized oracle or gas token?
These things are not trivial. They determine where application developers will build and break or break the long -term success of a chain.
To expect the protocol manufacturers to agree, it is like asking a hundred people to agree on the menu of a buffet.
It is not all technical either – there are considerations of social layer. Take for example Rogue, @ Fede_inter, the next ZK Rollup who wants to have no VCS, an initiate allowance and a completely just launch as Bitcoin did.
Manufacturers have different opinions. They launch their own chains. It’s as simple as that. It is economic freedom. We have to celebrate it.
A solution?
However, there may be a certain consolation in the fact that the L1 assessments are already compressed.
One of the most upscale L1 increases last year was the Monad. The evaluations were not disclosed, but it was said to the status of Unicorn according to Pitchbook, which places Monad in the range of one billion.
Or consider the L1 Initial, which was estimated at $ 350 million last year.
These increases are nothing like what has been seen in the last cycle.
Contrast this when Avalanche increased to an evaluation of $ 5.25 billion in 2022 or in flow, which raised an assessment of $ 7.6 billion.
These numbers are considerably decreasing for L1.
Public markets responded to disgust for more channels, and private markets correct overtime. The free market works.
The data check when we zoom in. The graph below shows a downward trajectory for total funding collected for blockchains.
For those who are frustrated by “too many channels” who would not want to see any, it is probably not a satisfactory answer.
The execution of this frustration is also an underlying desire to see more applications.
Funny fact: Consumer applications ironically received the share of the company’s financing lion compared to the infrastructure in 2013-2017 (the thesis of the FAT protocol of Joel Monegro was written in 2016).
This has, of course, reversed today. Is there a reason why the financing of applications fell in disgrace with the VC?
Take it 1kx, which claims to be one of the most active investors in consumer applications.
The partner 1kx Peter Pan said to me: “Applications live and die by their traction and follow – it is an immediate feedback loop. While with the infrastructure, you can continue to find funding in a pre -launch state according to existing market comps and push reality more and more.”
Fat penguins, Infinity Axie, Off The Grid, Rodeo and Layer3 are some examples of applications that have surmounted this feedback loop, said Peter.
Applications of applications also collectively exceed income from the underlying protocol (measured by REV) on most channels today.
If free markets have worked to correct L1 over-evaluations, perhaps the reverse can also occur for the financing of applications.
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