Regarding the issue of monetary premium, I find it difficult to have a definitive answer.

I may be wrong, but there are indeed some people holding top ten assets that have almost no other practical use, simply because they believe these assets are a store of value. I think there are some rational factors in the market, but more people may view these L1 tokens as a representation of cash flow multiples (GCF, Gross Cash Flow, the ratio of asset valuation to cash flow). From this perspective, some assets may seem undervalued, some overvalued, and some are fairly valued.

Perhaps a better approach is not to evaluate these assets solely based on data from last month or last week. Of course, many people like to annualize the data from the past month to infer whether the asset is expensive or cheap.

  • But the more important question is: what will these chains look like in two, three, or five years?

Each chain has its specific user block space. For example, Ethereum's L2 solutions or some consumer-facing applications on Solana. The question is, how much impact will the projects built on these chains today have on the demand for block space if their scale expands in the future?

At the same time, these chains are also expanding their supply capabilities. Therefore, if both demand and supply are increasing, what will the future revenue be? How will the valuation of these assets look at that time?

I think we should focus on their potential performance in three years. To the best of my estimate, there are currently about 50 million cryptocurrency holders in the United States, and globally there may be around 400 million. If we look at the number of active on-chain users, that figure may only be between 10 million and 30 million, depending on the statistical method.

  • If we assume that the number of on-chain users grows at a rate of 5% per year, then the entire industry may indeed be overvalued. But if the on-chain user base can experience explosive growth like ChatGPT, going from zero users to hundreds of millions of users, presenting a 'hockey stick' growth curve, then the situation would be completely different.

If you believe that on-chain wealth and user base can reach such a level, then in three years we might see 500 million users directly using on-chain applications, or at least participating in some form of on-chain operations. In this case, I think some blockchains are actually undervalued.