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95% of the 'active' on the Plasma chain relies on 'zero Gas' transfers subsidized by Paymaster (Part Seven). This subsidy is funded by the foundation using 40% of its total 'Ecosystem and Growth' fund (Part Six).
It becomes very clear: these 40% of tokens (currently valued at tens of billions of dollars) are Plasma's only 'arsenal'. The consumption of this arsenal is divided into two phases:
Phase One (now): 'Universal' subsidies. Subsidizing end users with Paymaster to buy 'daily active users (DAU)' and 'on-chain data', setting up the facade of 'prosperity' first.

If you go back to review the technical documentation of Plasma or the 'research reports' from KOLs, you will likely see a highlight: Plasma introduces Ethereum's EIP-1559 mechanism. This means there will be a 'burn' model. This immediately gave the market a 'deflationary expectation,' and many people associate it with Ethereum's 'Ultrasound Money' narrative, thinking it could also become 'deflationary' in the future.
To be honest, this design is very appealing to token holders. I initially thought it was a good value capture mechanism. However, when I looked at this mechanism alongside the 'Paymaster subsidy' we discussed in previous articles last weekend, I discovered a fundamental contradiction.

I once compared Plasma and Tron, concluding that they are only similar in the "customer acquisition layer", while the endgame is completely different. The more I thought about it, the more I felt that Plasma's true "mirror opponent", or rather what it genuinely wants to surpass, is not Tron at all. It's Base, as well as Arbitrum, OP, and those "orthodox" L2s.
To be honest, comparing an L1 and an L2 is somewhat "unfair" technically. But from a "business strategy" perspective, they are doing the exact same thing: competing for Ethereum's developers, applications, and users.
Base (backed by Coinbase) and Plasma (backed by Bitfinex) are both examples of CEX (centralized exchanges) personally getting involved in chain creation. However, the paths they chose reveal two completely different philosophies, making this war very interesting.

ConsenSys's 'vertical integration' strategy (MetaMask + Infura + Truffle + Linea) is so 'convenient' and so 'smooth' that it is becoming a 'cognitive trap.'
While it brings 'usability' to the Web3 ecosystem, it is also systematically 'castrating' the core capabilities of the next generation of developers. The success of Linea may precisely come at the cost of the entire ecosystem's 'anti-fragility' and 'knowledge diversity.'
The cost of 'convenience': a 'great shrinkage' of developer skills
Let’s recall the Ethereum developers of 2017. To build a DApp, you had to:

In previous analyses, we discussed Linea's 'profit engine' (sequencer) and 'data value' (AI feeding). But these are all 'direct', Web2-style profits.
This underestimates ConsenSys's ambitions.
ConsenSys's ultimate script is not to earn those small gas fees or SaaS subscription fees. Its endgame is to leverage its absolute control over the 'full-stack infrastructure' to become the first and only 'infrastructure investment bank' in the Web3 space.
And Linea is the 'Proprietary Trading Desk' of this investment bank. What it trades is not stocks or bonds, but the risks of the Web3 infrastructure itself.

In all past analyses, we have almost universally praised Linea's 'EVM equivalence' (Type 2 zkEVM) as a genius strategy. It has 'anchored' the massive standard of EVM through 100% compatibility, thereby 'capturing' developers and mature infrastructure.
But today, we must propose a contrary and unsettling inference: Linea's 'perfect compatibility' may not be the 'booster' for the EVM, but rather the 'petrifier' of the EVM.
It is using the most sophisticated lock of ZK cryptography to turn Ethereum's 'now' (the current EVM specification) into an un-evolving 'eternity'. Linea's 'loyalty' to the EVM is becoming the heaviest 'technical debt' on Ethereum L1's own evolutionary path.

In lending protocols, what is the lifeline? It's not LTV, it's not the interest rate curve, it's the oracle. The oracle is the 'voice of God'; it tells the protocol 'your collateral is worth this much right now.' Once this voice is wrong, the entire protocol will be liquidated and drained.
Aave's attitude towards oracles is 'strict defense.' It has established a robust governance mechanism to review, approve, and manage the sources of oracles, essentially locking them to Chainlink.
The design of Morpho Blue took my breath away: it decentralized the oracle's 'granting authority.'

The design concept of Morpho Blue seems to be targeting Aave's 'bulky' and 'inefficient' aspects. Aave is like an old established bank, with cumbersome processes and low efficiency (large interest spreads). Morpho is like a newly launched fintech company, flexible, efficient, and has eliminated all intermediary steps. So, is Aave really in danger? I actually think Aave's 'moat' is terrifyingly deep.
First of all, Aave's greatest asset is not its code, but its 'brand' and 'trust.'
Aave has been operating safely for many years, enduring several extreme market conditions. For institutional funds of over a hundred million dollars, 'safety' and 'predictability' are much more important than 'earning 1% more.' aToken (Aave's deposit certificate) has become a hard currency in the DeFi world, integrated as a foundational asset by countless other protocols.

In the past few days, I have mainly been testing Morpho's deposit (Lending) feature. Everyone is saying how friendly Morpho is to borrowers (high LTV, low interest), but a market is two-sided, so what is the experience like for us 'lenders'?
To be honest, my first feeling is: confused and tired.
The first experience: 'the curse of choice'.
I opened Aave, deposited USDC, and there was just one option. I got aUSDC, and the interest rate is exactly that, simple and clear.
I opened Morpho Blue, wanting to deposit USDC. Wow, 10 markets popped up on the page.

After playing with DeFi for so long, one of the most awkward questions new projects face is: 'What is the use of my token?' Aside from trading on DEX, the core financial function—lending—basically has no chance. Want to use Aave or Compound? You have to beg the DAO governance, wait in line for six months, go through countless rounds of risk assessment, and in the end, you will probably still be rejected.
Morpho Blue's 'permissionless' feature completely changes the game.
The first core insight: from 'permissioned' to 'self-service' leverage.
In the past, the privilege of becoming 'collateral' was granted by centralized entities like Aave DAO (though it is a DAO).

Recently, everyone has been praising how efficient Morpho Blue is and how 'clean' its design is. But as an old researcher who has stumbled upon many pitfalls in DeFi, my first reaction is: what is the cost? There is no such thing as a free lunch in the financial system. Improvements in efficiency often mean a transfer of risk. Morpho does solve Aave's 'systemic risk', but it also introduces several tricky new risks.
The first and most obvious one: the oracle risk has been 'fragmented' and 'decentralized'.
In Aave, oracles are a big deal. Which price feed to use is strictly reviewed by DAO governance, essentially only trusting Chainlink. This is a 'single point of trust', but it is also a trust point that has been market-tested and meets high standards.

To understand Linea, we must understand the business nature of its creator, ConsenSys. ConsenSys is not a protocol laboratory; it is an infrastructure company. And the ultimate script of an infrastructure company is to create 'dependencies' and then 'charge' for them.
Linea is not a new product from ConsenSys. It is the final chapter of ConsenSys's 'Infrastructure Extortion' trilogy.
Act One: Infura - 'The Centralization of Traffic'
Ten years ago, running an Ethereum full node was difficult. ConsenSys launched Infura, providing a 'free, high-speed' RPC node service.

When we talk about Linea's 'zkEVM Type 2', we praise its 'EVM equivalence'. We say it perfectly replicates every detail of the EVM with mathematical perfection (zero-knowledge proof).
But this 'perfection' comes at a cost. That cost is the 'industrial hell of the prover'.
A fact systematically ignored by the market is that proving an 'EVM equivalent' block is currently the most computationally expensive and engineering complex path among all ZK-Rollup solutions.
The core dilemma of Linea lies in its choice of a path that is 'mathematically the most elegant' but 'industrially the most difficult'. What it bets on is not the ZK technology itself, but the 'Moore's Law of computing hardware' and ConsenSys's ability to 'navigate the industrial supply chain'.

Our understanding of L2 seems to be bound by the metaphor of 'space.' When we say 'scaling,' we are diverting transactions from the 'crowded L1 main road' to the 'spacious L2 highway.' This is a story about 'capacity' and 'space.'
This is a fundamental misconception.
L2, especially ZK-Rollup, its truly revolutionary disruption is not about 'space,' but about 'time.' Linea is not providing a wider road; it is building a 'time machine.' It creates a completely new, tradable, and market-ignored asset: time difference (Temporal Arbitrage) by decoupling 'execution' from 'finality.'

We often say that Plasma is 'EVM compatible', which sounds like no big deal. Now 90% of new L1/L2 claim to be EVM compatible. But we must understand that the 'value' behind this term is completely different. Some 'compatibility' is superficial; the toolchain is incomplete, or it requires specific packaging, and developers still have to learn new things when they arrive.
I must admit that Plasma has done this very cleverly and very 'pragmatically'.
Its EVM compatibility is 100% 'borrowing'. I took a look, and it fully supports the most popular Ethereum development tools, such as Hardhat, Truffle, and Remix. What does this mean? It means that the tens of thousands of Solidity developers in the industry can deploy their verified code from Ethereum, Polygon, or BSC directly to Plasma 'without any changes' and without any new learning costs.

In the previous articles, we spent a lot of time analyzing Plasma's 'long board': the unlimited resources of the Bitfinex/Tether group, the lightning customer acquisition ability of 'USDT zero gas', and the 100% EVM compatibility and developer friendliness. These advantages have allowed it to have a 'king bomb' start in the L1 competition. But to be honest, how far a project can go often does not depend on how long its long board is, but on how deadly its short board—or 'vital point'—is.
After studying for so long, I personally believe that Plasma's risk points are not singular but consist of three interlinked 'time bombs'.

The DeFi circle is always debating one question: Is the future for 'integrated' applications (like Aave, a full-service bank), or for 'composable' underlying primitives? Recently, I looked at Morpho and felt it is the latest representative of the 'primitive faction'. It bets on one thing: making lending as 'dumb' as possible might actually be the smartest.
What is a 'lending primitive'?
Uniswap V2 is the 'trading primitive'. It doesn't matter what your coin is, it simply provides a pool of x*y=k, simple, reliable, and usable by anyone.
Morpho Blue attempts to be the 'lending primitive'.

I've recently been looking at the MORPHO token. There’s a question that has been on my mind: if Morpho Blue is truly 'immutable' and 'governance-free' as the official statement says, then what is the purpose of the $MORPHO token? Is it just a pure air token? After researching the white paper and community discussions, I found that its value lies not in Blue, but above Blue.
This is a very critical design, completely different from the token logic of Aave and Compound.

One of the core selling points of Morpho Blue is that it is very 'pure'. A set of deployed contracts that only handle lending and liquidation. No administrators, no DAO, no 'governance'. This sounds great, very decentralized, and resistant to censorship.

After playing with DeFi for so long, what everyone cares about is nothing more than two things: security and yield. Traditional lending protocols like Aave often sacrifice yield (the interest rate spread is ridiculously large, and the deposit interest rate is pitifully low) for the sake of security. Morpho comes out and says it wants both. I didn't believe it at first, but after studying its 'isolated market' mechanism, I found it actually makes some sense.
The core is that Morpho solves the 'efficiency shackles' of the Aave model - shared risk.
Let's first talk about the problem with the Aave model. Aave is a 'big pool'. You deposit USDC, I deposit LINK, and he collateralizes ETH to borrow USDC. All assets are mixed together, and liquidity is shared.