Arthur Hayes, co-founder of crypto derivatives change BitMEX, has warned that the majority Layer 1 blockchain tokens exterior Ethereum and Solana are unlikely to outlive long-term. In an interview with Altcoin Day by day, he argued that many newly launched networks, regardless of attracting early investor consideration, lack sustainable fundamentals and carry inflated valuations. Hayes emphasised that preliminary hype typically creates short-term worth features however doesn’t assure enduring success for these initiatives.
Monad and the Dangers of Excessive-Valuation L1s
Hayes particularly highlighted Monad, a lately launched L1 backed by Coinbase Ventures. On the time of his assertion, MON token had risen 45% since its ICO, reaching roughly $0.037 with a market capitalization close to $398 million.
Regardless of these features, Hayes expects a dramatic decline, citing the coin’s excessive totally diluted valuation and low circulating provide. He famous that many new L1s observe a sample of early surges adopted by sharp corrections, pushed by preliminary investor optimism somewhat than elementary worth.
In response to Hayes, new L1 initiatives typically entice consideration as a result of buyers hope to find the following Ethereum. Early pumps create pleasure, however most tokens fail to keep up momentum as soon as hype fades.
Enterprise capital help could briefly prop up costs, however Hayes warned that this doesn’t assure long-term success. Consequently, he believes most L1 tokens exterior Ethereum and Solana are destined for collapse.
Ethereum and Solana: The Standout Networks
Regardless of the challenges going through newer L1s, Hayes identifies Ethereum and Solana as exceptions. He sees Ethereum as the inspiration for institutional blockchain adoption.
Giant banks and organizations now choose public networks over non-public chains resulting from safety and utility benefits. Layer 2 options like Arbitrum and Optimism will assist Ethereum scale whereas sustaining privateness, positioning it for sustained progress.
Solana, in keeping with Hayes, stays the second-largest L1, benefiting beforehand from meme coin exercise. Nonetheless, he acknowledges that meme-driven progress has slowed.
Solana will want a brand new catalyst to keep up consumer engagement and worth momentum. Whereas Hayes stays skeptical that it’ll surpass Ethereum, he believes the community will proceed to play a major function within the blockchain ecosystem.
Hayes’ Magnificent 5
Along with Ethereum and Solana, Hayes named Bitcoin, Zcash, and Ethena as his high cryptocurrency picks. These networks mix adoption, safety, and sensible utility, which he considers vital for long-term success. In contrast, most different L1 tokens face a excessive danger of decline as early enthusiasm fades.
