Alliance DAO Partner QW: L1 lacks a moat, long-term value should be on the Application Layer rather than infrastructure.

Wu reported that Haseeb, managing partner of Dragonfly, published an article defending the “exponential growth of L1”: L1 chains are not priced based on current revenue (such as P/E ratios), but rather on their potential for exponential growth – similar to Amazon, which lost money in its first 22 years but eventually exploded. He reviewed the leap of DeFi and stablecoins from millions of dollars in TVL to hundreds of billions, calling for a belief in the exponential growth of the industry. In response, QW, a partner at Alliance DAO, questioned the long-term holding value of L1. He believes that a high P/E is not the issue; the core problem is that L1 lacks a moat: users can easily bridge assets, developers can migrate quickly, and chains can be launched easily, with switching costs far lower than AWS. He suggested that chains need to vertically integrate the Application Layer (as Solana, Base, and Hyperliquid are currently practicing), or bet on the Application Layer rather than the infrastructure to capture exponential value.